TAS has published a report on the cost implications of providing a London-style bus network in the whole of England. It estimates that the full annual cost of delivering this could be as high as £3.2bn a year. This would be the result of using London-style procurement, revenue risk, vehicle and service standards and offering comparable network coverage. The report takes as its starting point the methodology used previously in two reports written in 2003 and 2004 for the DfT and the CPT respectively. The analysis has then been extended to take advantage of the availability of additional data and of the results of other research undertaken by TAS in the intervening years. It then provides important new analysis of the likely cost trends in the industry under a ‘franchised’ system, bearing in mind the experience of labour cost inflation prior to the onset of the recent recession. The analysis suggests that cost pressures could add between £387m and £616m (between 3% and 4.4% per annum) to bus operating costs in England by 2025.
Responding to the reports, PTEG Support Unit Director, Jonathan Bray, said, ‘The £3.2bn cost of bus franchising they claim in their latest report is based on something that nobody is planning to do – which is to reproduce London levels of bus service throughout England, from Lands End to rural Northumbria. Even using a premise that nobody is considering, to get to the suitably scary number of £3.2bn TAS are forced to systematically underestimate the returns that bus operators currently extract from their local monopolies under bus deregulation, and pile on a whole series of biased assumptions about cost increases from bus franchising which bear no relation whatsoever to the only current detailed proposition we have on bus franchising – which is in Tyne and Wear.’
A further TAS report entitled ‘The PTEs 1975-1985 – An Analysis of Performance’ is reviewed by Roger French on pages 18-19 of this week’s issue (July 17th).