Private frustration expressed in at ‘flawed’ investigation.

Having sacrificed successive weekends and bank holidays over the past 15 months to satisfy new last minute requests from London for obscure data, it’s perhaps not surprising that bus companies don’t feel much goodwill towards the Competition Commission.

In its response to the publication of the commission’s provisional findings on its investigation into local bus services, the Confederation for Passenger Transport, the official representative of Britain’s bus companies, was defensive but polite. However, in private bus companies savaged the commission’s methodology.

The commission says that too many bus companies face little or no competition in local areas and has put forward remedies to changes this (see panel on right). Meanwhile, individual bus operators that Passenger Transport spoke to this week accused the commission of an assessment of their market that failed to give the full picture.

Their complaints include that the commission has:
* failed to take the private car into account, which bus operators believe to be their main competitor;
* investigated local bus services on the grounds that it is potentially a distorted market, but has failed to explain what a distorted market is;
* proposed franchising as a potential remedy, yet it chose not to include London (the only part of the country where bus services are franchised) in its study;
* and has subjected the industry to a lengthy and costly inquiry but has identified adverse effects on competition of £70m a year – equating to only 2.4p for each passenger journey.

“From what I have seen they have failed to put any intellectual rigour into it,” the managing director of one medium-sized bus company told Passenger Transport.

“I’m pretty underwhelmed. How many millions of pounds have they spent doing this? It’s like something that came out of a kindergarten. How can the minister contemplate reading it if it’s got that lack of rigour?”

Bus operators feel vindicated by the modest adverse effects on competition that were identified – £70m a year – of which £5-10m is attributed to local authority tendering practices and £60m is attributed to bus operators (about 2p per passenger journey). But they are fearful that the remedies could be disproportionate.

“What are they [the Competition Commission] likely to throw away for the sake of that tuppence?” the bus operator asked. “But they won’t be around for that. They will have moved onto washing machines.”

The publication of the commission’s provisional findings on May 6 was uneventful. The share prices of the UK’s large passenger transport groups were largely unaffected by the news – some even increased on the day of the announcement.

An executive at one large bus group questioned the timing of the announcement, which co-incided with election results for the AV referendum, Scottish Parliament, Welsh Assembly Government and English local authorities. “The Competition Commission usually try to get publicity for their inquiries,” the operator said. “Perhaps it is a reflection of how little they have after 15 months of investigation.”

He questioned whether the investigation was necessary in the first place. “You would not believe the level of paperwork and detail we’ve had to go through,” he said. “It’s been a distraction that has got in the way of the real issues that effect bus passengers.”