2014 is set to be a challenging but exciting year for the bus and coach industries in Scotland. Scotland will host the Commonwealth Games and Ryder Cup. It is also the year of Homecoming with over 400 events planned across Scotland to mark the occasion. Passenger transport, including both bus and coach, will be logistically vital to the success of these events.

Events such as the Commonwealth Games and the Ryder Cup will involve the co-ordination of fleets from across the UK to provide the transportation required with sub-contracting and private coach travel adding to the number of operators involved. It is important that these events leave a legacy of improved public transport infrastructure and modal shift and don’t alienate the core market of everyday bus passengers with event-specific routes and tourists being seen to be given priority.

Politically, the highest profile event in 2014 is undoubtedly the independence referendum. While much of transport policy is devolved it would be foolish to ignore the importance of this vote. The potential impact on policy matters such as taxation, fuel duty and EU membership are as yet unclear but undeniable.

One element of transport which is not fully devolved is the remit of our Traffic Commissioner. This is particularly relevant as the Senior Traffic Commissioner’s guidance on bus punctuality will be published in 2014. The draft guidance supported a stringent reduction in the window of tolerance and on the acceptable levels of punctuality for a bus service. It is not expected that these severe targets will continue through to the final document without some adjustment but the industry will have to wait and see.

Within the Scottish Parliament, Iain Gray MSP will attempt to progress his Private Members Bill on regulation of the bus industry. The consultation period on his draft paper finished in September and a revised bill is expected in the new year. The consultation draft advocated giving local authorities the powers to franchise local routes but was vague on the costs of this proposal. It is unlikely that the bill will garner the requisite cross party support to progress. However, it will continue to put bus regulation on the political agenda in the coming months – as is evident in the work of the Bus Stakeholders Group. In 2014 the Bus Stakeholders Group will continue its look at the bus service registration process and is likely to extend its scope to consider a revision of the policy and guidance relating to Statutory Quality Partnerships, Statutory Quality Contracts and Bus Punctuality Partnerships.

The budgets for BSOG and the National Concessionary Travel Scheme are set for both 2013/14 and 2014/15. However, the outturn for both schemes is of course as yet an unknown. It is hoped that the recent review of the concessions scheme will help minimise the chance of the cost of the scheme exceeding the capped budget and work will continue in 2014 to create a model that will ideally marry the budget for the scheme in future years to the true likely cost.

Funding for these schemes continues to be a perpetual issue, with operating and fuel costs rising at a level not adequately reflected in the schemes’ budgets. CPT welcomes the decision to freeze fuel duty in 2014 but notes that there is no likely reduction in fuel costs predicted.

On a more positive note, the successful bidders for the Scottish Government’s initial £3m Bus Investment Fund should be announced in the first quarter of 2014 and a further round of the Green Bus Fund will be launched later in the year. Both present opportunities for partnership and innovation and should bring further improvements to Scotland’s bus fleet and network.

The release of the IPPR think tank paper last week suggests that there is merit in more widepsread franchising of bus networks. http://www.ippr.org/publications/greasing-the-wheels-getting-our-bus-and-rail-markets-on-the-move

When STSG held its round table in December 2014 the debate showed that different parts of Scottish society want different things from the bus industry. How best can we unite society? Giving local authorities control could be too divisive but may be the least bad option if there is no better alternative.

The local authorities that work closely in partnership with their local bus operators show that there is a better alternative. Local authorities can help local bus operators to drive up profits and share in the financial benefits if the partnership terms are agreed with the operator. Similarly bus operators can help to deliver social benefits if the terms of the social benefits are agreed with the local authority.

It should be unthinkable for a bus operator not to have agreed terms of reference with their local authority for providing this essential social service. If the unthinkable happens, then there is a case for a local authority to step in to address the market failure and consider franchising the bus network.

However if the Local Authority cannot then afford to run the bus network, e.g. when when borrowing money becomes more expensive, then the local authorities might need to cut services. In these circumstances the communities affected might then ask if they could use the new Community Empowerment Act to requisition the services back out of local authority control.

Rather than attempting to fix failure it would be better to plan success and start now. Every bus operator in Scotland needs a detailed revenue share partnership agreement with their local authorities setting out delivery responsibilities and performance targets funded from the fare revenue. This would lever investment in Council maintained footpaths, benches and toilet facilities as much as operator investment in vehicles and customer service improvements.

Narrow protectionism has been allowed to reign too long. Leadership from local authorites and bus operators on partnership working is needed – now.

At last week’s CPT annual conference the debate about who owns Scotland’s bus companies, and the need to maintain shareholder value was a frequent talking point. The Chief Executives of the major bus operators emphasise their rail operations as a way of keeping the share price up, but does that mean the rail operations start to influence the decisions made in the bus industry. Municipally owned bus companies like Lothian are sometimes perceived as different from shareholder owned companies, but is the difference in the perception or the ownership. A key test of ownership is that the customers own the services they use. As economic advisor John Kay reminds us, myths about ownership must not be allowed to get in the way of good decisions. (http://www.johnkay.com/2015/11/11/is-it-meaningful-to-talk-about-the-ownership-of-companies)

A new report by KPMG for DfT says (https://home.kpmg.com/uk/en/home/insights/2015/12/local-bus-market-study.html#Link%202):
-Local bus markets show considerable variation reflecting differences in socio-demographic factors, land use, the relative attractiveness of alternative modes of transport, wider transport policy and government expenditure, as well as the performance of local bus operators.
-Local authority and bus operator objectives are reasonably well aligned and centred on market growth but sometimes differences exist between stakeholders on the best way to achieve those objectives.
-There is a range of policy levers available to government to influence demand and supply in local bus markets. In most instances the policy levers available in de-regulated markets enable local authorities and operators to meet their objectives.
-Where there is pressure for market reform, there is a need to carefully consider the impact of interventions on passengers, operators and local authorities. Each local bus market is unique and each requires a tailored approach to help it deliver local objectives.

For anyone looking at what works for buses and why, this excellent report comparing bus service delivered in Scandinavian Countries is well worth a read http://www.urbantransportgroup.org/resources/types/reports/scandinavian-way-better-public-transport.