Bus deregulation has failed due to lack of competition, says think-tank

The deregulation of the bus industry failed to create competition, with only one per cent of weekly services outside London facing effective competition over all or the majority of their route, a think tank has found.

The Institute of Public Policy Research furthermore finds that 37% of services face no competition at all, and bus fares have risen by 35% in England outside the capital since 1995, whilst overall bus use plummeted - falling by 33% since de-regulation, in 1986. Over the same period, bus patronage has risen by 99% in London.

Consequently, the IPPR recommends in its report the creation of Transport for London-style local transport bodies to contract out bus services in the same way that the capital's body does. Will Straw, IPPR associate director, said: "Outside London, bus passenger journeys are down and fares are rising higher than inflation.

"Examples of successful bus markets outside London are all too rare so local transport bodies should be given powers to hold uncompetitive providers to account." He suggested that these bodies could take on responsibility for school and hospital transport too, in order to make savings to protect services.