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Bus Regulation (Scotland) Bill - Consultation by Ian Gray MSP

Draft Response on behalf of Stirling Council
1. Do you support the general aim of the proposed Bill? Please indicate yes/no/undecided and
explain the reasons for your response.
Yes. Our experience suggests that deregulation has not worked well in our area, for reasons
explained later in this submission. We would expect the measures proposed to meet the
general aim of achieving a better system.
2. What would be the main practical advantages of the legislation proposed? What would be
the disadvantages?
Proposal Advantages Disadvantages
Franchising profitable and
non-profitable routes
Would allow the planning of
a bus network which
provides services across an
area, instead of commercial
(operator-planned) and
tendered (Council-planned)
services operating at arms
length from each other.
May lead to reduction of
service frequencies in
densely-populated areas in
order to provide more
opportunities for other
communities and thereby
reduce profitability and
increase subsidy levels.
Minimum level of service
Would address community
and council aspirations
(including encouraging a
modal shift) and ensure
provision of services at less-
popular times.
May reduce profitability and
increase subsidy levels.
Financial penalties
Would help to ensure
network stability by inhibiting
operators from poor
performance of, or premature
withdrawal from, franchises.
Increases operators financial
risk, which may result in
higher tender prices.
Removing the need to prove
market failure
Would remove a major
impediment to securing
balanced service provision in
a given area.
Commercial operators likely
to see this as a major
constraint on commercial
freedom, which may make
bus operation less attractive
as a business activity.
Note that the advantages are both social (see above) and economic (the economic cost of
congestion and the cost to the public purse of alternative solutions to congestion and social
exclusion), whereas the disadvantages are predominantly economic. There seems to be a
policy issue here do we wish to secure a bus network that will meet the needs of the
greater part of society, supports social inclusion and encourage a modal shift to public
transport, or, given the current economic climate, do we wish the bus network to provide the
best level of service that can be achieved within current subsidy levels?
3. In what ways do you envisage reregulation being used to improve bus services?
In the Stirling Council area, we would envisage using the proposed powers to ensure a more
equitable distribution of services between our urban and rural communities and to remove a
number of network anomalies, evidence for which is given in response to Question 8.
However, this would be dependent upon sufficient budgetary provision being available to
meet aspirations.

These powers are likely to be more useful to authorities whose area contains a mix of small
urban and accessible rural areas than to authorities in densely-populated urban areas or
island and remote rural areas (see response to Question 8).
4. How can community transport be better utilised to serve local communities and particularly
low passenger volume routes?
Community transport comes in a number of different forms, ranging from voluntary car
sharing to Demand Responsive Transport (DRT) services operating under local or transport
authority contracts. The kind of community transport that will work best in a given area is
determined by a number of factors, such as geography, population density, availability of
skills, willingness to engage in voluntary work and historical provision. The model we have
found to work best in the Stirling Council area is delivery of DRT services by a number of
different operators under Council contracts, but this is not necessarily the best solution in
other areas, where the mix of factors is different.
Nonetheless, ensuring some level of support for whichever form of community transport
which works best in an area is a good way of helping reduce social exclusion (and the costs
that this brings to the public purse) for some of the most vulnerable groups in society.
5. Do you agree that the Traffic Commissioner should be able to impose greater financial
penalties on operators who a) fail to meet the terms of the franchise or b) walk away from the
franchise altogether?
Yes. Financial penalties create incentives for operators not only to ensure proper
performance, but also to avoid under-pricing bids in order to win contracts that they may not
be able to fulfil within the price they have tendered. We have had some recent experience of
operators suddenly ceasing to trade, due at least partly to unrealistic tender pricing. This
creates problems for passengers and for public authorities struggling to maintain continuity of
6. What is your assessment of the likely financial implications of the proposed Bill to you or your
organisation? What other significant financial implications are likely to arise?
Achievement of a more balanced and attractive public transport system will come at a cost.
In the current economic climate, that cost may have to be met by reducing or rebalancing
commitments across other areas of capital and revenue transport spending, such as road
maintenance or construction or concessionary fares.
In doing so, authorities must again consider the costs to the public purse of the alternatives
to a bus network which does not meet the needs of the community, that is:
the costs of congestion to the economy;
the cost of increasing social exclusion; and
The cost of finding alternative solutions to resolve the above.
Decisions on allocation of scarce resources are essentially political. It is for the legislature to
set the framework for the kind of society that we wish to see and for the executive to
implement measures to develop that vision.
7. Is the proposed Bill likely to have any substantial positive or negative implications for
equality? If it is likely to have a substantial negative implication, how might this be minimised
or avoided?
There are two main implications for equality:
(a) geographical equality; and

(b) social inclusion, especially in relation to young people, elderly people and disabled
people without access to a car. Even in Stirlings most affluent rural communities, 1 in 10
households do not have access to a car. This rises to over half the number of households
in some areas of the City.
The measures proposed are likely to increase geographical equality, that is, to ensure that
most people have a minimum level of service, irrespective of how small or remote their
community may be. This effect is generally positive.
The measures proposed will have positive implications for social inclusion. A more equitable
distribution of bus services is likely to help social inclusion by benefiting groups of people
who tend to be highly dependent on public transport. The benefits of such go beyond the
cost of public transport provision. If, however, the necessary financial support for the
proposals restricts benefits or entitlement for concessionary passengers then this is likely to
have negative implications.
8. Do you have any other comment or suggestion that is relevant to the need for or detail of this
The responses above are based upon a particular view of the successes and failures of the
deregulation of bus services in relation to the geographical characteristics of different parts of
Scotland. See Appendix 1: Population Density, Settlement Pattern and Bus service provision
in Scotland for data on which this analysis is based.
We believe that deregulation has mainly been successful in:
1. Densely populated urban areas (>5 persons per hectare), accounting for around 45% of
the Scottish population; and
2. Islands and remote rural areas (<0.2 persons per hectare), accounting for around 7% of
the Scottish population.
We believe that deregulation has been much less successful in the small urban and
accessible rural areas that lie between these two extremes and account for around 48% of
the Scottish population. The reasons for this are explained below.
In densely populated urban areas, operators will seek to maximise profit by maximising
revenue offering attractive, high-frequency services. Normally, one dominant operator will
plan and control the bulk of the bus network. There will be some competition for tendered
services and smaller operators will serve popular routes and niche markets. There may be
some Demand Responsive Transport (DRT) in less populous parts of the area.
On Islands and in remote rural areas, operators will seek to maximise profits by securing
council contracts and may combine their bus or DRT business with some other economic
activity. Normally, the local authority will plan and control the bulk of the bus network.
Demand Responsive Transport may be the main type of service in more remote areas.
Commercial activity will be concentrated on larger settlements (e.g. Inverness) or express
coach operation.
In between these two types of area, lie small urban and accessible rural areas, accounting
for around 48% of the Scottish population. In these areas, we would contend that
deregulation has been generally unsuccessful in delivering an attractive bus network.
In this type of area, operators will generally seek to maximise profits, not by maximising
revenue, but by minimising costs. It is noticeable that the cases referred to in the document
Falkirk, Midlothian, East Lothian and Moray are all small urban and accessible rural areas,
as is the Stirling Council area.

As this submission is made on behalf of Stirling Council, the examples given here are all
drawn from this Council area. We would expect authorities with differing geographical
characteristics or operational experience to make the appropriate case for their own areas.
The Stirling Council area comprises the City of Stirling, the neighbouring towns of Bridge of
Allan, Dunblane, Doune and Callander, the villages of Cowie, Fallin and Plean and a
considerable rural area, partly accessible and partly remote in character. The accessible
rural area contains the villages of Aberfoyle, Balfron, Crianlarich, Croftamie, Drymen, Killin,
Lochearnhead, Port of Menteith, Strathblane, Strathyre, Thornhill and Tyndrum. Remote rural
settlements are predominantly within the area of Loch Lomond and the Trossachs National
In a microcosm of the Scotlandwide situation, deregulation has worked best in the most and
least populous areas, with difficulties arising where there is a mixture of commercial and
supported services. Several examples are offered of the successes and failures of
Stirling City: deregulation has been successful in providing high-frequency commercial
services to Stirling University, between Stirling, Forth Valley Royal Hospital, Falkirk and
Edinburgh, between Stirling, Alloa and the Hillfoots and in the more populous areas of
Stirling and its surrounding towns and villages that lie on or near main arterial routes, such as
Bannockburn, Braehead, Bridge of Allan, Broomridge, Cowie, Fallin, Plean and St Ninians.
This network of commercial services is predominantly planned and controlled by First
Scotland East Ltd.
Remote rural areas: deregulation, together with beneficial legislative changes from 2001
onwards, enabled the development of DRT services in the Balquhidder, Fintry, Killin &
Strathfillan, Strathard and Trossachs areas. These flexible and convenient demand-
responsive services, delivered by taxis and private hire cars, replaced failing high-subsidy
rural bus services that could not be provided cost-effectively at attractive frequencies. The
DRT services are operated by locally-based taxi and private hire car operators under Stirling
Council contracts. The services are therefore planned and controlled by Stirling Council.
Between these two extremes, there is a mix of commercial and supported services.
However, a number of anomalies have emerged over the years.
Cambusbarron: this community lies within the City of Stirling, but, being divided from the
rest of the city by the M9 motorway, retains the identity of a separate village. For some years
after deregulation in 1986, the village enjoyed a half-hourly link with Stirling, but commercial
provision has eroded over time. In 2002, First Scotland East reduced their commercial
service, but the council could not maintain the previous frequency, as this would have meant
operating in competition with the remaining commercial journeys. This would have had two
main effects. Firstly, the commercial operator would have the valid objection that a
subsidised service was competing with an unsubsidised one. Secondly, this may have
affected the viability of the remaining commercial journeys, leading to their withdrawal. The
Council may then have had to take on responsibility for the whole service. Lacking control
over the whole network, the Council would not have been able to combine the
Cambusbarron section with another service in order to ensure an equitable distribution of
services between communities. First Scotland East Ltd later withdrew all commercial
journeys to Cambusbarron on Saturdays. These journeys were replaced on a supported
basis. The frequency of service has been an ongoing issue between the Council and
Cambusbarron Community Council for many years.
Gartmore: following deregulation in 1986, Midland Scottish Omnibuses Ltd, later part of
FirstGroup, operated a commercial service between Stirling, Aberfoyle and Balfron, where it
connected with services to and from Glasgow. This later became a supported service. In
2010, a local operator, Aberfoyle Coaches Ltd, introduced a commercial service from
Aberfoyle operating directly to Glasgow, via Gartmore and Balfron. Although less frequent
than the First service, it proved very popular with residents and visitors as no change of bus

was required at Balfron. In drawing up service specifications for the 2012 tender round,
Stirling Council decided to amend the timetable, reducing the supported service between
Gartmore and Balfron (which competed with the Aberfoyle Coaches service) and instead
increasing the number of journeys between Gartmore, Aberfoyle and Stirling, with journeys
timed to connect in both directions with Aberfoyle Coaches Aberfoyle Glasgow service.
This was put in place in April 2012, Aberfoyle Coaches Ltd having been the successful
bidder in the tender process. However, in June 2012, Aberfoyle Coaches Ltd suddenly
ceased trading. The Council could not replace the commercial Aberfoyle Glasgow service
as it competed with Firsts commercial services between Balfron and Glasgow. As the
increased level of service between Stirling and Aberfoyle was proving popular, the Council
did not wish to alter it. The result is that, while it is still possible to travel between Aberfoyle,
Gartmore and Glasgow and there are two direct journeys, waiting times at Balfron at other
times are long. Again, the Council has had to plan for a single service without control of
connecting services and, again, this has been an ongoing issue with a community council, in
this case Gartmore Community Council.
Loch Lomond: traditionally a major tourist attraction, Loch Lomonds popularity has
increased since designation of Loch Lomond & The Trossachs National Park. Access from
Stirling currently requires changing from a commercial Stirling Balfron service to a
supported Balfron Balloch service. However, the supported service west of Balfon takes a
circuitous route via Croftamie in order to provide that village with an adequate bus service.
This, and the change at Balfron, with break of fares (see Fares section below), have
reduced the attractiveness of this service to the extent that it will be withdrawn from Monday
19 August 2013, due to budgetary constraints combined with lack of use. A through Stirling
Balloch service could not be provided without competing with First Scotland East Ltds
commercial Service 12 between Stirling and Balfron.
New housing areas: in recent years, several new housing areas have been developed
within what is now the City of Stirling. These have proved difficult to serve unless they lie
along existing bus routes. Commercial operators are generally reluctant to extend or divert
their services into these areas, as they fear that passenger uptake will be low (due largely to
an expectation of high levels of car ownership in these areas) and existing passengers may
be lost if journeys are lengthened or made less direct. Any Council-supported service would
have to avoid competing with commercial services, which is not easy to achieve in a small
urban area without devious routes or stopping restrictions.
Some common themes run through all of these examples:
1. No single organisation or partnership plans and controls the overall bus service network.
2. Competition law inhibits local authorities and operators from adopting a joint planning
approach, which can be interpreted as anti-competitive collusion. Competition law
expects local authorities and operators to have a purchaser-supplier relationship.
3. The disjointed nature of the deregulated network can prevent adoption of the best
solutions, as these are dependent upon the ability to plan the network as a whole.
David Brown
Stirling & Clackmannanshire Councils
Public Transport Unit
Bus Station, Goosecroft Road,

31 July 2013

Appendix 1: Population Density, Settlement Pattern and Bus service provision in Scotland
Local Authority
of persons

Share of
Bus service
Effect of
Glasgow City 32.93
44.5% Dense urban
Successful -
generally one
operator plans
and controls
bulk of network
Dundee City 24.35
Edinburgh, City of 17.01
Aberdeen City 11.42
North Lanarkshire 6.83
Renfrewshire 6.62
East Dunbartonshire 6.20
West Dunbartonshire 5.88
Inverclyde 5.25
East Renfrewshire 5.14
Falkirk 4.88
Small urban
and accessible
commercial and
Unsuccessful -
no one agency
contriols bulk of
network. Mix of
commercial and
services has
resuled in sub-
optimal service
West Lothian 3.71
Clackmannanshire 3.03
Fife 2.64
Midlothian 2.29
South Lanarkshire 1.71
North Ayrshire 1.53
East Lothian 1.33
East Ayrshire 0.95
South Ayrshire 0.92
Angus 0.50
Moray 0.39
Stirling 0.39
Aberdeenshire 0.36
Perth & Kinross 0.26
Dumfries & Galloway 0.23
Scottish Borders 0.23
Orkney Islands 0.19
Island and
remote rural
Successful -
generally local
authority plans
and controls
bulk of network
Shetland Islands 0.15
Argyll & Bute 0.13
Eilean Siar 0.09
Highland 0.08
SCOTLAND 0.65 100.0%

Source: www.scrol,, Table UV02 Population density