A report published today by the Public Policy Institute for Wales suggests that a significant element of government subsidy is being captured as profit by the bus industry in Wales. Modelling by leading transport academic, Professor John Preston, indicates that bus companies in Wales could be making as much as £22 million more than a normal return on sales.
The report – A Fare Deal? Regulation and Financing of Bus Services in Wales– looked specifically at the impact of deregulation in Wales. Speaking about the report, Professor John Preston said:
“The overall impact of bus deregulation has been negative. Fares have increased whilst operator costs have gone down. Wales pays higher subsidies than the rest of Great Britain outside of London without any noticeable added benefit, and the lack of competition in some areas makes it likely that some subsidy leaks into operator profits. Our modelling suggests that this could be as much as 18%.”
The report suggests Quality Partnerships – which would place legal obligations into contracts – could be used to drive up performance, particularly in urban areas, whilst Flexible Transport Services – a door-to-door service which allows pre-booked tickets in a range of vehicles – would be better suited to rural areas of Wales.
Deputy Director of the Public Policy Institute for Wales, Dan Bristow, commented on the report:
“The Public Policy Institute for Wales uses evidence to inform policy making and improve outcomes for the people of Wales. This report is an important contribution to the thinking about transport policy and provides the Welsh Government with independent expert analysis of how it can secure a better deal for tax payers and bus users”.
A Fare Deal? Regulation and Financing of Bus Services in Wales, and Moving Forwards: Improving Strategic Transport Planning in Wales are available to view now.