Stagecoach warning over new rules for bus firms

Martin Griffiths: Proposed Bill would be a significant backward step. Picture: Contributed

Stagecoach Group has spoken out against the proposed Regulation of Bus Services (Scotland) Bill, saying that rather than improve services, it would actually make them worse.

The Member’s Bill, launched by former Labour leader Iain Gray, would give transport authorities greater power over bus services, including a new franchising power to tender contracts for profitable and non-profitable routes together.

However, in a letter seen by The Scotsman, Stagecoach chief executive, Martin Griffiths, wrote to Mr Gray, saying: “I believe the proposed Bill is completely unnecessary, based on depressingly flimsy evidence, with uncosted proposals which would damage the quality of bus services in Scotland and increase the financial burden on Scottish taxpayers already struggling with rising household costs.”

The chief executive of the Perth-based transport company also said: “Your proposed Bill, if it were ever implemented, would be a significant backwards step for the bus industry which is so vital to Scotland’s future prosperity.”

Mr Griffiths also said there was no need for drastic change in the structure and regulation of the industry, adding that it “ignores the economic reality of operating bus services”.

As part of the proposal, Mr Gray, MSP for East Lothian, said he wanted local councils to be able to bundle together profitable and loss-making routes and offer them as a package for which bus firms can bid.

In response to this, Mr Griffiths pointed out that over the last five years, the local bus industry had endured the “worst and longest economic recession in over 80 years”.

He said the industry has had to deal with fuel costs rising above inflation, local authorities cutting budgets for tendered services, as well as higher pension and National Insurance costs.

He also pointed out that the bus industry had largely preserved jobs, adding: “Structural change, as proposed by your Bill, would make no difference whatsoever to these economics with one exception.

“While bus operators currently shoulder these issues, the financial risk and burden under the proposed Bill would pass to taxpayers in Scotland.”

Mr Griffiths pointed to the model used by the London bus network, the same he says Mr Gray is advocating. He said that in 1999-2000, it cost taxpayers £44 million, before mushrooming by nearly 1,500 per cent to £690m in 2009-10.

He concluded: “The reality is that the commercial model outside London has delivered all of the benefits and at a fraction of the cost to taxpayers.”