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Competition Commission Driving Changes in Bus Markets

Scotland
01/11/2011
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The Competition Commission (the CC) is set to impose changes on local bus markets in an effort to open up the markets to greater competition. The changes will impact significantly on local transport authorities (LTAs). The CC's proposed changes follow on from its finding that, in many local areas, the largest bus operators face little or no competition, resulting in less frequent services and, sometimes, higher fares. The headlines of the remedies proposals for Scotland are:

the CC will recommend to the Scottish Government to introduce legislation to give LTAs additional powers to introduce mandatory bus-only multi-operator ticketing schemes, the terms of which are set collectively by LTAs, large and small operators and which must be available to all new entrants immediately;
until such legislation is introduced, the CC recommends that the LTAs develop or improve voluntary schemes;
the CC will recommend to the Scottish Government to change legislation to:
-
 require operators to specify in advance the number of frequent services they will provide, and to provide only that number (preventing operators flooding a particular route in response to a new competing service); and
- mandate a Code of Conduct, breaches of which can result in withdrawal of service registration;
the Scottish Government will be encouraged to develop tailored guidance for LTAs on the tendering of supported services. The development of the guidance will be coupled with the grant of powers to the LTA to obtain information about revenue and patronage of services which they can share with potential bidders for future tenders; and
bus station operators will be legally obliged to provide third party operators with access on fair, reasonable and non-discriminatory terms.

The CC's remedies are still in provisional form, but are unlikely to change significantly before the final decision, which is expected before the end of the year. LTAs should be gearing up in preparation for the changes.


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