Bus Services

Part of the debate – in the Scottish Parliament at on 19 April 2012.

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Photo of Alex Johnstone Alex Johnstone Conservative

I am afraid that I will not, because I have further points to make.

I am aware that buses have become an issue for the local elections and I understand that that is why the Labour Party is so keen to bring the issue forward. I took the trouble to speak yesterday afternoon to Conservative candidates who are campaigning on the ground in Scotland’s major cities. It was brought home to me more clearly—if that was necessary—that a genuine problem is building up in our cities. It is a crisis that has been building up consistently for the past six months and it is more important to us today than it was when Labour first brought it to the chamber on 26 January.

The problem is that we have market failure in the bus service system. I am a fan of markets and will continue to defend the market approach whenever it can be used effectively. I believe that the deregulated market approach to bus services has a great deal to commend it—that was the case for the past, and it remains so for today and for the future. I do not regard markets as being about profit and loss; I see them as being about supply and demand. The market failure in the bus service system in Scotland at the moment is interfering with the relationship between supply and demand.

The cause of the problem is that the bus system’s biggest customer by some margin—and which is growing as a proportion—is the Government itself. Government decisions are having an increasingly disproportionate effect on how services are run.

I will consider the changes that have happened and how they are affecting us. Various changes have been made to the BSOG, which have had different effects. First, the overall cut in the grant has an effect across the whole bus industry. The causes of that are financial constraints, and the Government can of course blame London for that if it wishes. However, the reduction must be managed so that the pressure is spread more evenly. The decision to pursue a mileage-related payment rather than a fuel-related payment has positive elements, because it will encourage fuel efficiency and investment in fuel-efficient buses in the future. However, it also skews the balance of payments towards rural rather than city bus companies and city services are suffering as a result.

At the same time, the concessionary fares scheme is being increasingly underfunded. The result is that bus companies are doing two things. First, they are using fare payers to cross-subsidise the concessionary fares scheme; that will increase over time, which will force up prices. Secondly, decisions have to be made about which bus services might be cut, but the number of people travelling on the buses is influenced by the number who use the concessionary fares scheme. The consequence is that more buses might run during the day, which is when the concessionary travellers naturally wish to use them, but fewer buses will be available at key times of the day when people want to get to their work, college or whatever. That distortion is caused by the Government’s market decisions.

I want the Government to accept the constraints within which it operates and to realise that it has contributed massively to a short-term crisis. The reduction in total funding is part of that, but the Government must realise that what it is in control of and how it targets the available funding to support bus services are also critical factors. The Government must review how it invests that resource and consider whether it is appropriate to provide concessionary fares to people from the age of 60, many of whom are in work, and at the same time to use reductions in support to critical, economically important bus services in our major cities as a way of funding that.