Law change sought in Wales to allow new municipals

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The Welsh Government has proposed allowing councils to set up new municipal bus companies, BBC News reported.

Currently there are two municipal bus operations in Wales – Newport Bus and Cardiff Bus.

If the idea went ahead, requiring a change in the law, councils which could demonstrate the bus market had failed in their area could start their own services.

The proposal was one of several in a consultation looking at how bus services could be improved in Wales, following concerns when three privately-run firms went out of business last year – Silcox Coaches in June, GHA Coaches in July and Lewis Coaches in August.

Other ideas included allowing councils to define specific bus services through franchises and allowing the Welsh Government to set up a national ticketing scheme for bus, rail or a combination of public transport.

The Transport Act 1985 introduced changes and privatisation to the bus industry, allowing authorities to sell their municipal firms and prohibiting councils from providing new services. It is the latter restriction – seen as out of date by the Welsh Government – that is proposed to be repealed, together with offering funding for firms to be set up.

There would likely be a series of tests councils would undergo to show that buses could only be provided through a municipal firm, and company would not be able to unreasonably inhibit competition with other operators. It is not thought there would be wide-scale take-up of the idea among local authorities, which already subsidise privately-run services.

Although 51 of the 64 respondents to the consultation had supported lifting the restriction, 10 bus operators and one council objected.
The objectors, according to the Welsh Government, claimed municipals which previously operated in the south Wales Valleys were not operated well and provided poor services.

John Pockett of CPT Cymru said: “I think there’s this idea in the background, same as with the railways, that it all used to be better.

“I live in Pontypridd – there are eight buses an hour between Pontypridd and Cardiff now. 40 years ago, before privatisation, there were two.”

The CPT told the consultation bus profits do not line the pockets of shareholders and that on average, 10 times the cash paid out in dividends is reinvested in the business.