THE BLOG

Labour's Bus Plans Are Economic Fantasy and Would Damage Vital Community Services

19/12/2014 17:43 GMT | Updated 18/02/2015 10:59 GMT

Less than six months from a finely balanced UK election, it's no surprise public transport and buses are under attack from politicians looking for a headline and some votes. But Shadow Transport Secretary Michael Dugher does everyone a disservice by failing to understand buses and pushing policies that will damage Britain's bus networks.

Let's look at the facts. Britain has a high quality, integrated and good value bus system. Our biggest city regions outside London have benefitted from £1.3billion of investment by major bus companies in new vehicles in the last five years alone. Passenger satisfaction is high at 88% and weekly bus travel is up to 40% cheaper than in London. Next year, buses in our biggest cities will offer London-style smart multi-operator ticketing.

There is no question, though, that our bus networks face a major challenge. They are being affected, like many areas in our country, by the impact of austerity. The squeeze on public spending has seen councils cut bus services they pay for by 24% in the past four years, while routes fully funded by commercial bus operators have grown every year over the same period. The result is that our country relies on commercial bus operators to deliver an increasing share of services.

Michael Dugher brazenly tries to shift the blame to private bus companies for these developments to fit a party political narrative about other sectors. Even worse, his plans to tinker with the structure of bus services fly in the face of financial and practical reality.

Earlier this month, Labour leader Ed Miliband outlined his party's plans for public spending from 2015-2020. He made clear that many central government departments, including transport, would need to reduce spending further. At the same time he said there was scope for a further £500 million of cuts from local government. A key principle was that there would be no un-costed spending commitments and the party would not "take risks with our public finances".

These promises are fundamentally at odds with the un-costed and hugely expensive bus policies being promoted by Mr Dugher. A weight of evidence from the Office for Budget Responsibility, the Local Government Association (LGA, the Institute for Fiscal Studies (IFS) and others makes clear that our country cannot afford the party's bus proposals, never mind that they are unnecessary.

The LGA has said that, by May 2015, Government funding for councils will be 40% lower than in 2010 and many local authorities are already in a "fragile financial position". The IFS, in its analysis of the 2014 Autumn Statement, warned of further cuts on a "colossal" scale and the prospect of five more years of austerity.

Local government's ability to fulfil its local transport responsibilities has been impacted already and there is more pain is to come. In Manchester, where Mr Dugher suggests there should be a system of costly bus contracts, the City Council is facing having to make £60m in savings this year - potentially with the loss of up to 600 jobs - when it has already had to save £250m since 2011.

It is economic fantasy to think that councils in future years will have the financial resources to deliver entire bus networks when they can't afford now the small proportion of services they currently provide. Neither do they have the resources to manage major and complex programmes of procurement. It doesn't take a genius to see that the numbers don't stack up. It could only mean higher bus fares and higher taxes.

So let's stop the pantomime talk about "bus barons" and stop demonising an industry and its employees whose services contribute £64billion in economic value to the country. Instead, let's have a grown-up and honest conversation about how we can work together on sustainable plans to make Britain's highly valued bus networks even better.

Martin Griffiths is chief executive at Stagecoach Group