Bus Privatisation Has Exposed the Myths of Privatisation
The cost of taking the bus has doubled since 1987, exposing the lies behind the privatisation and deregulation agenda – if we want decent bus services, it's time to take them back into public hands.
Credit: Marko Geber / Getty Images
A spotlight has recently been shone on the fundamental flaws embedded in the current ownership and operation of public transport. Much of the attention has focussed on rail services, as the pandemic exposed dysfunctions in the model of subsidising private rail companies’ profits during normal times, while socialising their losses in times of crisis. But rail services are not the only area of public transport in need of critical scrutiny.
Bus ownership in Britain was dramatically reshaped in 1985, laying the foundations for widespread deregulation and privatisation. In recent months, though, there has been a surge in appetite to transform regional and local bus services, as demonstrated in places such as Greater Manchester and West Yorkshire. The drive to reimagine the current approach to bus services has been fuelled by a critical report by Philip Alston, a former United Nations Special Rapporteur, which revealed that bus privatisation breaches basic rights.
Following on from this, a new briefing by Common Wealth explores and uncovers the multiple, compounding problems baked into the current approach, and sets out a transformative vision for the future of buses.
The Damaging Legacy of Bus Privatisation and Deregulation
At a time of climate and environmental breakdown, low carbon public transport options can and should be a pillar of a rapid and just decarbonisation strategy. Estimates suggest that a local bus journey is responsible for just over half of the GHG emissions of a single occupancy car journey. Yet, while the real cost of taking the bus and coach have doubled since 1987, the real cost of driving one’s own private automobile has fallen by 12 percent.
The implications for marginalised groups are stark. Lower paid people that live in deprived areas are more likely to turn down jobs due to transport-related issues and tend to be more dependent on bus networks. Further, as the Women’s Budget Group notes, ‘poor quality, unreliable and expensive public transport has a far bigger impact’ on the lives of women. Only 35 percent of the poorest 10 percent of UK households own a car or van, while 93 percent of the richest 10 percent of UK households (ranked by gross income) own a car or van. This situation has been exacerbated by austerity, with the increased cost of bus travel and the cuts to government spending on public transport going hand in hand.
Yet while households and communities grapple with the current costly and often ineffective bus service provision, private bus operator firms and their shareholders have made profits and distributed substantial sums to their shareholders. Arriva, FirstGroup, Go-Ahead, National Express, and Stagecoach, for example, paid out an average of almost £150 million a year to shareholders between 2008 and 2018. Further, Common Wealth analysis uncovered that the share ownership of bus companies is dominated by a combination of high-net-worth individuals, large banks, major asset management companies, and firms owned by foreign governments – with Abellio, for instance, being 100 percent owned by the Dutch Government.
Reimagining Bus Networks: A Closer Look at Greater Manchester
Earlier this year, it was announced that Greater Manchester’s bus network would be brought back under public control, where operators bid to run services on a franchise basis, with Mayor Andy Burnham stating that bus privatisation since the 1980s has paved the way for ’35 years of routes being cut and ticket prices rising.’
Common Wealth’s analysis found the ownership structure of Greater Manchester acts as a sort of microcosm of the country, featuring high-net-worth individuals and company founders, large banks, and asset management companies, as well as foreign governments. Moreover, from 2010 to 2020, the six bus operators distributed over £171 million in dividends to their shareholders, with the largest three of these operators—Greater Manchester Buses, Wellglade and First Manchester—paying out 99 percent of these dividends.
Transforming the Ownership and Operation of Bus Services
It is increasingly clear that the deregulated, privatised model of bus service operation is incompatible with the integrated, fair, reliable, and affordable services required to serve the needs of communities.
In place of this, an opportunity exists to organise bus networks around forms of municipal and public ownership and democratic re-regulation of services. Doing so can and should address the compounding problems stemming from the current model, enabling earnings to be reinvested in vital services – reversing fare increases, expanding services, and decarbonising bus fleets.
In the UK and beyond, examples of publicly owned bus networks demonstrate their success. As the campaign organisation We Own It demonstrate, public ownership is the norm in many other European countries, like Germany, where publicly owned operators provide 88 percent of all local public transport journeys. Further, as We Own It points out: ‘The 2016 UK Bus Awards were a resounding success for public ownership – with publicly owned Reading Buses winning three awards and publicly owned Nottingham City Transport being named UK Bus Operator of the Year for the third year in a row.’
Moreover, as demonstrated by the recent strike action in Manchester, the shift towards municipal bus companies should be accompanied by efforts to dramatically improve workers’ rights in the transport sector, alongside a broader New Deal for workers. This should include, for example, the creation of a new legal definition of a ‘worker’ to cover all existing employees and workers, guaranteeing a strong set of rights from day one, ending zero hours contracts, stronger and more equitable family friendly rights, an end to ‘fire and rehire’, and the significant expansion of sectoral collective bargaining.
Decades of bus privatisation and deregulation combined with years of austerity paved the way for increasing fares, unreliable services, and poor pay and conditions for many bus workers. At a time when communities face intersecting crises, a new era of bus ownership and operation can pave the way for a green, affordable, and vibrant future for passengers and communities.