West Yorkshire Metro welcomes Competition Commission probe into bus sector

Aug 21 2009 by Henryk Zientek, Huddersfield Daily Examiner

BUS companies are facing an investigation by competition watchdogs following concerns over high fares.

The Office of Fair trading plans to refer the £3.6bn bus sector outside London to the Competition Commission following a five-month probe.

The OFT found evidence of limited competition that was forcing up prices – with passengers forking out on average 9% more for fares in areas where there is only one major national player.

The OFT said it was also concerned about “predatory behaviour” by bus firms to stifle competition and see off new rivals.

It said taxpayers risk a “double hit” from a lack of competition on the buses, given that the sector is subsidised by about £1.2bn in state funding.

The decision was welcomed by West Yorkshire Metro, the body overseeing local public transport provision – including Huddersfield where the market is dominated by First Group, Arriva and Stagecoach.

Metro chairman, Clr Ryk Downes, said: “The OFT’s findings reflect Metro’s experience and confirm that the current structure of the bus industry outside London is not serving the interest of passengers.

“In West Yorkshire, there are three main bus companies, which each have their strongholds, and as we have seen recently, some feel they can introduce above-inflation fare rises and cut services at will.”

Clr Downes said that despite Metro organising training to help smaller bus firms bid for services, more than 90% of tenders put out attracted only a single bidder.

“This cannot represent competition or a good deal for passengers in anyone’s book, whatever their political leanings,” he added.

“I welcome the news that the OFT is referring its findings to the Competition Commission and will be happy to feed in Metro’s comments.