As threatened a number of times, I’ve finally pulled together this piece on why bus privatisation isn’t all it’s made out to be (cross-posted to Slugger O’Toole)

I simply want to walk through the scenarios for privatisation we have seen in GB since 1986 and their pitfalls.

Deregulation

The main model followed in GB outside London was to deregulate bus transport.  All publicly owned bus companies, including municipal fleets, were privatised, either by sale or Management-Employee Buyout, and were no longer regulated.  They and any bus company holding the appropriate accreditation could operate on any route having given 56 days notice, and charge as they pleased.

Popular routes saw plenty of competition and some at best doubtful (and in some cases quite illegal) practices designed to get competitors off the road, such as selective price reductions (which presumably had to be paid for by higher fares on less profitable routes) and running extra buses just before the competitor’s bus arrived.  Former multi-operator ticketing schemes being undercut by operator-specific schemes (as in Birmingham) have seen it made harder for entrants to gain access because of the convenience and price to the customer of sticking to the incumbent operator.

Off-peak services and rural routes saw very little competition, and this has got worse because the market is dominated by five main operators – Arriva, First, Go-Ahead, National Express and Stagecoach – who largely run monopolies in local areas with little outside competition.

Public subsidies were restricted to unprofitable services, which meant that fares in former metropolitan areas rose by 47.7% in real terms between 1986 and 1994, compared to a GB-wide general rise of 16.9% over the same period – Sheffield, for example, had to increase its fares by 35% due to the ending of subsidies.  Between 1984 and 2010, bus fares would rise by 60% in real terms from 1986 to 2010 against an increase in motoring costs of 10% – which in itself is enough to push people off public transport.

Unprofitable services, which include evening and Sunday services on otherwise profitable routes, had to be subsidised.  In one case I read of, but for which you won’t find the citation in my further reading at the bottom of this article, a bus company gave notice that it was going to withdraw a particular bus service because it wasn’t profitable.  The local authority decided it was socially necessary, and tendered it as a subsidised service.  The same company won the tender, where in the past they would have cross-subsidised against other routes where possible, costing the ratepayer/council tax payer money.

There were two added problems with tendered services.  Firstly, a local authority might not be able (or might not even wish) to subsidise all routes that might be considered “socially necessary,” and routes would therefore cease.

Secondly, as would happen in the course of rail privatisation, a minimum service would be specified.  Unless there was sufficient farebox income to be made from running additional services, the successful company would not operate more that minimum.

The effect of the cut in subsidy in 1986 was to increase the proportion of bus operating costs paid for through the fare box from 64% in 1985 to 72% in 1986.  Falling demand and increased subsidy of unprofitable services saw this proportion fall to 50% by 2009.

Tendering arrangements

London followed the opposite model.  Route planning and fare setting were centralised, and private companies were able to tender to operate London bus services – so no competition on the ground, but rather companies were able to compete to receive the farebox income for the duration of their contract.

This model was actually quite successful, with the rise in passenger numbers far eclipsing the fall in the rest of the country, although much of this can be attributed to increased subsidy, particularly since 1999.

General notes

The key problem with privatisation is that every privately-owned commercial company has the same object in its Memorandum of Association: to carry on the business of a company, or, in short, to make money.

The immediate cost to the staff of a privatised company is downwards pressure on wages, which in the case of bus drivers was to see their average wages fall from 7% above the average manual wage in 1985 to 13% below in 1995.  This was caused by a number of factors, such as more part-time drivers, and the explosion in the use of minibuses, for which new drivers could be paid a lower rate (as indeed happened on Ulsterbus – new drivers would start on 25-seaters at a lower rate of pay, and be promoted to big buses later)

The cost to the council tax payer is that the tolerance of a private company for cross-subsidisation is low, which has pushed up the burden on them of supporting unprofitable services.  By way of contrast, the Rural Transport Fund in Northern Ireland subsidised a number of Ulsterbus services, including tourist services, but Metro is expected to cross-subsidise all of its services from the profitable ones.

The advantage of the London model is that because the farebox income goes to TfL rather than the operator, it means little to the operator whether they carry five passengers per bus or 50.

There was a massive increase in subsidy for London services from 1999 to 2002, coinciding with the establishment of Transport for London, with the clear intention of pulling more people onto the buses to aid congestion.  A further country-wide increase in 2003/2004 can be attributed to expansion in concessionary fare entitlement.

The Northern Ireland picture

Translink is painted as a monopoly, which isn’t actually entirely true.  As in GB, express services (with stops more than fifteen miles apart) are already open to competition, as with AirCoach and the excellent Eamon Rooney coach service to Rostrevor.  Local services not currently operated by Translink are I believe open to a private operator to tap into, and I don’t think this is restricted to school services.

The same subsidies are available to private operators as are available to Ulsterbus and Metro:  concessionary fares and, until April of this year, fuel duty rebate – so the services have to be run commercially.  This mirrors the situation in GB, where fares for commercially viable services cannot be artificially lowered through subsidy.

Significantly, apart from the Rural Transport Fund, there is no operating subsidy for Ulsterbus and Metro services in Northern Ireland.  Actual buses are paid for through the capital budget of DRD, partly due to Executive policy to reduce the average age of buses and keep it low, but otherwise the two bus subsidies of Translink are left to balance the books between farebox income and operating expenses.

Conclusions

What I was not able to do was source figures on public transport subsidy all the way from 1985 to the present day – something I suspect Salmon of Data could dig up rather more quickly.  Rail subsidy is known to have escalated quite considerably (it doubled within a year of privatisation, and had gone up a further 50% to £3 billion by 2003), and I would want to see figures excluding the impact of concessionary fares to be able to comment accurately on the potential impact of privatisation on subsidy levels for Northern Ireland.

What I can do is present some general principles.

It is known that DRD do not intend to deregulate bus or train services in Northern Ireland, probably because of the examples throughout Great Britain where services have been lost because of lack of profit to the operator and the cost to local authorities of maintaining unprofitable services.

They do intend to follow one of two models: to invite tenders for baskets of routes (some profitable, some not) where either the operator keeps the farebox income in return for a fixed sum, or where all farebox income is handed to DRD in return for a higher fixed sum.

With the number of unprofitable routes being operated in Northern Ireland (and of course unprofitable journeys on otherwise profitable routes), I think they are tending towards the latter model, one with its own dangers.

One of the things that has pushed Translink subsidy up over the last fifteen years has been bus replacement, partly to get rid of buses with increasingly difficult to source parts due to engine age, and because old buses are not attractive to passengers.  Private bus companies would be required to buy their own vehicles, and would tender on that basis – or, indeed, tender in such a way that average bus age considerably increases so they can avoid renewing vehicles at all to save money.  This is considerably less obvious than when one could board an aging Leyland Leopard or Bristol RE in the 1990s compared to the new Cityliners and Goldliners from 1989 or so, because passenger comfort is in a completely different world from when I went to school in the 1980s, but even to compare the oldest vehicles in the Metro fleet with the newest shows the newer buses off well.

It also changes competition from an illusion to non-existent.  The passenger is likely to get the same bus (purchased from Translink by a private operator) and the same driver (different uniform) in the same traffic jams at the same time (if not less frequent), with fares theoretically set to balance the books (certainly this side of 2020, where DRD and its successor are likely to remain substantially underfunded), and making the same complaints about the buses being late, and probably seriously considering moving back into their car.  In other words, nothing will change.

There also lies within this a question of responsiveness to customer demand.  Translink used to issue monthly amendments to its timetables, although these have decreased in frequency.  With tendered services, there will be restrictions on how quickly DRD can expect a private company to respond to increased demand, including obtaining vehicles and the services of drivers.

The final aspect for now is the prospect of selling Translink off to the private sector wholesale.  The NI Audit Office report highlighted that the big firms in GB experience a lot lower overheads due to sheer size, but there would have to be considerable reorganisation before this could happen – if bus operations in NI are not to be deregulated, transport planners currently working for Translink would have to be transferred to DRD, for example.  Both the NIAO and the Committee for Regional Development have raised questions about DRD’s ability to plan transport effectively, and since Translink would need to retain some planners to deal with private hires, drivers’ rosters etc, it isn’t clear that enough professionals would be available to move to DRD.  It also isn’t clear how much Translink would raise on the open market due to its dependence on public subsidy.

Between that uncertainty, the expectation I would suggest that will maintain pressure to keep fares up to maintain the profits of the private company (whether directly through the farebox or indirectly through the tender to operate) and the lack of funding available from the Executive that goes way beyond the problems of Stormont House it is hard to see how any of the suggested benefits to the ratepayer and passenger of privatisation in terms of lower subsidy, lower fares and certainly better timetables would actually come to fruition beyond the short term.

Further reading

Alan Howes Associates (2011), Overview of Bus Industry Performance, Great Britain, since Deregulation

Balcombe, RJ (1988), Bus deregulation in Great Britain: a review of the first eighteen months, Transport Planning Div1sion, Transport and Road Research Laboratory, Department of Transport

Butcher, L (2010), Buses: deregulation in the 1980s, House of Commons Library

Donald, R & Pickup, L (2007), The effects of local bus deregulation in great Britain on low income families—the case of MerseysideHouse of Commons Transport Committee (2oo6), Bus Services across the UK

Lawton-Smith, H, Deregulation and privatization in the UK freight, and bus and coach industries, Regulatory Policy Research Centre, Hertford College, Oxford

Matthews, B, Bristow, A & Nash, C (2001), Competitive tendering and deregulation in the British bus market – a comparison of impacts on costs and demand in London and the British Metropolitan Areas, Institute for Transport Studies, University of Leeds

Mayer, M (2004), Public Transport – the Real Cost of Privatisation, Radical Statistics

Pond, R, (2006), Liberalisation, privatisation and regulation in the UK local public transport sector, Working Lives Research Institute, London Metropolitan University

Preston, J (2004), The Deregulation and Privatisation of Public Transport in Great Britain: Twenty Years On, Transport Research Foundation

Savage, I (1993), Deregulation and privatization of Britain’s local bus industry, Departments of Economics and the Transportation Center, Northwestern University

At times, I think the Christian Church has lost the plot.

Being on the evangelical wing of the Church, beyond denominational boundaries, and also having a lot of friends who are not, the fuss over the Ashers bakery case and the Irish equal marriage referendum has ensured that my Facebook feed has plenty to read.

A number of things disturb me.  Perhaps it’s the influence of a sermon I heard by a Presbyterian minister about a year ago which pointed out that you can’t expect people who aren’t Christians to behave like Christians.  Perhaps it’s Jesus reminding us of planks in our own eyes and that we are hypocrites when we judge others despite being less than perfect ourselves.  Perhaps it’s the realisation I had a number of years ago that there isn’t a hierarchy of sin and we can’t look down on each other.  The humility to realise what it means for me to be no better than anybody else (more on that another time.)

Sin.  There’s a word that is not very popular, and it’s probably because the world has no concept of what sin is, except when it’s Christians banging on about how we need to be saved from them.

And perhaps that is my point.  I remember my friend who tells of her time in the Christian Union at DCU, where someone quietly saying the word “jargon” was enough to get whoever was talking to take a step back and reframe in words other people could actually make sense of.

So in a world where people don’t know what sin is, a different language is needed, that meets people where they are.  I’ve suggested in the past that we should explore what God means as creator, sustainer and life-giver, and if he is all of those things, then we owe him everything, and, actually, ignoring him and generally failing to thank him is a big deal – essentially, why God, Father, Son and Holy Spirit is relevant to life in a country that I’m not particularly certain was ever Christian to begin with.

It’s all about meeting people where they are.  Explaining why we believe even that God exists.  Having an answer about the Bible (it’s more certain with the New Testament than with any text of a similar age that the standard Greek text as received today is pretty much as it was written in the 1st Century, due to the number of early manuscripts, which predate and far exceed the number of early manuscripts of Pliny, Caesar’s Gallic Wars etc), and things like that if we’re asked.

It’s also about reading the book of James and realising the reality that preaching the Gospel is going to be all words and no action if the person you’re witnessing to is hungry, poor, or in any other way disadvantaged – that we are hypocrites if we do not act as we believe.

And, as I overheard this morning, having an answer about equal marriage, given that the terminology I’m using is loaded.

There are certain things to note.

Firstly, throughout Ireland, marriage is a civil matter.  It is lawful for a heterosexual couple to be married within the context of a religious service: the minister is licensed to conduct the ceremony, witness the vows and pronounce the couple married, and I think most ministers will recite Jesus’ words “Therefore what God has joined together, let no one separate” as a prayer over the newly married couple, because many Christians, myself included, believe they have indeed been drawn together by God, but in the end it is the local authority Registrar of Births, Deaths and Marriages who will certify that the marriage is valid.

Secondly, and I suspect this is a large reason why the referendum passed, equal marriage doesn’t affect straight people other than when it’s their friends who are affected.  I’ve seen the pain in my friends’ eyes because all they could get in 2012 in Scotland was a civil partnership, something that felt to them, and I know to many others, as incomplete (they got married a few weeks ago.)

Nor is it intended that it will affect the Christian Church, not least because probably the majority of Christian ministers, Jewish Rabbis, and certainly of Muslim Imams could not offer a religious same-sex marriage ceremony – I cannot speak for other religions.

Thirdly, I don’t think that equal marriage is much of a threat to traditional marriage, if any.  Others may disagree with me about that, but I think that a far greater threat is from men and women who break their vows to love and cherish each other and to be faithful.  I’ve seen the effect of emotional abuse in particular, and many readers will know the impact of physical abuse.  That is the real threat to marriage.

More than that, my dear lesbian friends who are committed to each other for life are a challenge to me and to all other couples to live up to their dedication and love.  To love my wife as I ought.  To treat her right.

That is the serious business.

And so to Ashers.

It’s a judgement that worries me.  Not because of the discrimination on the basis of sexual orientation, which I’m not convinced of in all honesty, but because of the discrimination on the basis of political opinion.

Does that mean that if I were a printer, I would be obliged to print posters for DUP and Sinn Fein even though I would thoroughly disagree with some of the content, simply because I might do so for another political party?

The answer is “probably.”  I can’t say I would be at all happy, but then again I’d’ve made the cake in question if I had been Ashers.  I probably can’t have it both ways.

One good thing arising from the decision concerning political discrimination, however, is that the judgement did put to bed the notion that a conscience clause would have been a let out for Ashers.

In the end, however, I think the wisest words about the cake I have read are here, especially with regard to Matthew 5:41 and 44.  I can say no more.

Last night the BBC called in search of commentary on the new bus lane cameras.  Only the last question got used, but Tara Mills and I talked for over a minute and a half about why I think the cameras are good news for law-abiding motorists, the amount of the fine (same as a parking ticket) and Belfast traffic (with a name check for Wesley Johnston) and bus usage, including my suggestion that the City Council should have capitalised on off-peak access to Belfast for those who want to shop outside rush hour.

I’ll write in a little more detail about the principles on Slugger later on, but for now here are the notes I wrote last night to talk around. The last paragraph is more or less what got broadcast.

I think the bus lane cameras are great news for motorists, buses and cyclists, despite what Jimmy Spratt said on behalf of the committee for regional development last July about it being nothing more than a revenue generating tax.

I’ve sat too often either driving or with my wife at the wheel in the outside lane at 8.30am watching dozens of private cars go up the inside, including some private hire taxis. I came to the conclusion that the Ormeau road bus lanes actually had a different set of three letters beginning with B.

I’ve sat on buses delayed waiting for gaps to pull round parked delivery vehicles, and slowing down other traffic as a result. This morning I was on my bicycle depending on the kindness of motorists to let me out and round – slowing them down.

In the end, the law-abiding motorist has nothing to fear, although as a motorist I hope to see discretion where people duck round a car turning right without holding up legitimate buses, cycles and public hire taxis in the bus lane.

There are issues of buses not using lanes which are designed to take them where they are going. The Donegal square South camera, if it stops others using the bus lane, I hope will see more buses go through the bus gate at line hall street as designed.

The proof will be in the eating. The PSNI are perceived, rightly or wrongly, as having paid relatively little attention to bus lanes, and I think that is why there was so much abuse. NSL will also have to up their game, as many motorists suffer from delays due to the existing lack of clearway and bus lane parking restriction enforcement on many routes.