Deregulated buses anniversary weekend: Part 2

Sunday 26th October 2025

Today’s the day.

Imagine the excitement exactly 39 years ago today, Sunday 26th October 1986, as the new deregulated regime for Britain’s buses outside of London brought to an end 53 years of tight supply side regulation through the requirement for bus operators to hold a Road Service Licence for each and every bus route and its timetable. These were controlled and issued by the Traffic Commissioner for each area who determined when and where buses could run and what prices could be charged with other bus operators, British Rail and local authorities all having powers to object and stymie any innovation.

No wonder, as car ownership grew exponentially in the 1960s and 1970s and social habits changed, not least with the advent of television replacing cinema and theatre visits and out-of-town shopping destinations with large car orientated supermarkets becoming established, the number of passengers travelling by bus plummeted during that period. By the 1980s funding required by local authorities to maintain networks which relied on cross-subsidy to keep services going had become unsustainable with annual reductions the norm. This situation increasingly saw bus routes that had potential to grow the market through improvements to frequencies to instead be cut back so vehicles and staff could be redeployed to keep unremunerative rural routes going with the result both hemorrhaged passengers.

Something had to be done.

The Conservative Government had brought in legislation to ease regulations six years earlier in 1980 which included complete deregulation of express routes, excursions and coach holiday tours, the removal of fares control on bus services and a presumption in favour of a new bus service, rather than against, in Traffic Court hearings overseen by the Traffic Commissioners, but it was the removal in 1986 of the need to seek permission to run more frequent local bus services, change timetables and introduce new routes that opened up the market to commercial opportunities not seen since prior to 1933, when regulation had been introduced.

The backstop of local authorities gaining new powers in 1986 to contract bus routes through a tendering process to plug the inevitable gaps where commercial bus routes weren’t feasible was crucial in not leaving areas isolated from the bus network.

I well remember in Brighton and Hove there was much anticipation during the summer of 1986 as new commercial networks for the competitive era had been registered a few months prior to the 26th October start date and we wondered whether neighbouring Brighton Borough Council owned Brighton Buses would duplicate any of our routes and I’m sure they wondered the same about us, as well as colleagues at the by then separate Southdown bus company encroaching into the city network, to say nothing of any new entrants as envisaged in the legislation.

In reality it was pretty much business as usual, no doubt helped by the aforementioned bus companies having a history of working together under joint agreements and Brighton and Hove being a densely populated area meaning there were few gaps in the network needing local authority funded tendered routes.

The idea behind deregulation was to create a contestable market for bus service provision so if one bus operator failed to provide a quality service on a commercial corridor, then another would step in and run something better to gain market share. The fact there may not have been competition in some areas, such as Brighton and Hove, didn’t mean the principle had failed, because the market was still contestable. Indeed there were instances of Brighton Buses extending a route or two over the top of our routes for a short time and new small operators did start up and compete on certain corridors. This kept us on our toes determined to provide the best possible service for our passengers.

In Brighton and Hove 95% of mileage was operated commercially with the County Council saving money on what it had previously paid to support the overall network through competitively tendering the other 5%. Nationally there was an approximate 80/20 split, commercial/tendered.

One of the things I was determined we’d do from the start was publish a comprehensive timetable book for passengers with all the bus network’s routes included, even those by our new competitors. This would be issued on two fixed dates in the year so we’d overcome the perception following deregulation that everything was always changing. It wasn’t. And thanks to the good sense and cooperation of colleagues at Brighton Buses, Southdown and the local authorities, who all paid towards the inclusion of their services in the book, we maintained this principle for more than 25 years until I retired. We also took a relaxed attitude towards accepting each others return tickets (even if prices were different) as well as maintaining mutli-operator Travelcard type tickets (including use on local trains until that ended at the behest of the rail company) with PlusBus continuing and becoming one of the best selling such tickets in the country. It’s what customers wanted and we were in the business of providing what customers wanted so we did it. That’s how a commercial market should work.

Sadly, such helpful approaches of using the freedoms brought about by deregulation to encourage passengers weren’t widespread and there were notorious examples around the country of wasteful head to head competition leading to destabilised networks, confusion for passengers and a bad name for the deregulated regime. And that’s continued on and off for the last 39 years. Those original skirmishes in high profile cities in the conurbations, not least Glasgow, are now much in the past, but as yesterday’s blog showed, there are still small scale competitive moves starting up demonstrating the market is still very much contestable in both theory and practice.

I’m sure no-one would want a return to the heavy handed form of control which stifled innovation and saw consistent and endemic reductions in passenger numbers prior to 1986. 39 years on we now have the Bus Services (No 2) Bill about to become an Act in Parliament which will build further on the new form of contracted bus operation being rolled out in the Metropolitan conurbations (it’s not really ‘franchising’ in the true sense of that word, as is common in retail) along with a much welcome heightened spirit of cooperation and partnership between many local authorities with bus operators in ‘shire’ and ‘unitary’ areas, helped by unprecedented public funding made available through various schemes (BSIPs, ZEBRA etc) to facilitate improved bus services to attract passengers and introduce new vehicles particularly those with zero emission.

As I’ve often commented, while so ever this level of significant public funding continues it’s good news, but experience over the last fifty years indicates it won’t, and can’t last and one day a Government of some political complexion is going to reign back the financial support and inevitably once again look to the private sector to use its commercial expertise to try and develop the market for bus travel without so much reliance on public funding.

As evidence of this, just look at the railways where a fortnight ago Secretary of State for Transport Heidi Alexander oversaw the transfer of Greater Anglia back to public ownership and control stating “we’ve got to run a financially sustainable railway” crucially without explaining what that means, but according to the BBC News website adding there was a “gap of about £2 billion” between what the government “ploughs” into the railways and fare income from passengers.

The use of the word “ploughs” sums up the problem when public funding goes into public transport. It’s not seen as positive investment expenditure but something that’s almost grudgingly paid over.

Although there were well known successes, bus deregulation also brought profiteers intent on making a ‘fast buck’ through draconian cost cutting rather than revenue generation. It was, and still is, an easier option than investing and trying to generate revenue but is not a long term sustainable way of working. Passengers deserve an attractive bus service, the kinds I often feature in these blogs such as provided by Delaine in LIncolnshire, Lynx in Norfolk, Stephensons in Essex, Central Connect in Essex, uno and Centrebus in Hertfordshire, Safeguard, White Bus, Falcon and Carlone in Surrey, Compass Bus in Surrey and Sussex, Go-Ahead in Oxford, Bournemouth, Isle of Wight, Southampton, Swindon, Brighton and Hove and Crawley to highlight just a few in East Anglia, south and south east of England I’m particularly familiar with and evidence that the deregulated market can work for the benefit of passengers.

There’s no doubt deregulation didn’t serve the Metropolitan conurbations well. There was no sense of an integrated network with different brands understandably causing confusion in the minds of many passengers. At the moment, with public funding flowing through various streams (Sustainable Cities, Bus Service Improvement Plans etc) it’s proving straight forward for elected Mayors and Council leaders to create new unified regional brands and enhance services. This is to be welcomed and I very much hope will be consistently supported by central Government.

Those examples of private sector competitive skirmishes as featured yesterday provide short term benefits for passengers (cheaper fares and enhanced frequencies) with the private companies’ profits taking the hit. Managers are accountable to company shareholders and owners for the consequential reductions in profits.

What is of concern is a lack of similar accountability for public funding provided by taxpayers where I have also highlighted examples of completely wasteful spending on bus routes which have no justification at all (cf Cambridgeshire’s route T2 featured yesterday) and others which continue with no sense of value for money (cf DRT schemes as featured here ad nauseam).

If route T2 had been tried out by a private bus company it would have been pulled as a failure by now but there’s no similar sense of guardianship over public money and I’m sure the route will continue for months more with no prospect of attracting passengers, as with most of the DRT schemes I’ve featured over the years.

Industry veteran and commentator, Chris Cheek, observed in his book published last year, Britain’s Buses in a New Era, there’s a cycle of around three to four decades with control oscillating between the public and private sectors as the amount of public funding rises to an unsustainable level followed by a need to reduce it. Chris wryly observes “on this basis, maybe we can expect the next era of deregulation to begin somewhere around 2050”.

Interestingly, since that book’s publication we’re seeing a much more volatile political landscape and unless there are significant changes in the meantime, I forsee the possibility of significant regime change soon after the 2029 General Election, so make the most of the next three and a half years.

There’s also plenty of turbulence ahead from the upcoming England wide reorganisation of local government creating unitary authorities across the country (outside the Metropolitan conurbations) together with a plethora of new Mayoral controlled Combined Authorities. It wouldn’t surprise me if many Public Transport Officers at the soon to be abolished county councils take the opportunity for early retirement leading to a loss of valuable experience.

Ultimately, what the last 39 years have proved is that it’s not ownership (public or private) that’s important or which sector is in control, it’s whether you have dedicated, passionate people at the helm who totally believe in public transport and do their very best to give the most attractive service possible to encourage passengers. As one astute commentator observed to me after yesterday’s blog – a benevolent monopoly has always been the best bet for buses.

Roger French

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