Bus Tendering Final Report - Introduction

Background

This report presents the findings of a research study into supported bus services undertaken on behalf of the Department for Transport (DfT) by Atkins Transport Planning. The three-year study was commissioned in 2001.

Local authorities in England (outside London) are able to secure the provision of local bus services that would not otherwise be provided on a commercial basis by bus operators by offering a contract for the provision of the service, in most cases after a competitive tendering process. This mechanism has enabled authorities to ensure that access to the transport system has been maintained and enhanced for a great number of people, particularly those without access to a car living in areas that would otherwise have limited public transport services. Currently around 20% of the total local bus service mileage in England (outside London) is supported by local authorities - the remainder being operated on a wholly commercial basis.

In recent years Government has substantially boosted funding available to authorities through the Urban and Rural Bus Challenge process and the Rural Bus Subsidy Grant (RBSG). The annual cost of supporting tendered local bus services in England (outside London) in 2002/03 was £260 million.

Enabling local authorities to continue providing supported services remains a key element of the Government's 10-year strategy for transport. However, after a number of years of relatively stable prices the cost of supporting local bus services has been increasing in recent years and is a concern. As in all areas of public sector procurement there is a need to ensure that value for money is being achieved and that funding is allocated in a way that best serves policy objectives.

Atkins Transport Planning has, on behalf of the DfT, been reviewing how local authorities procure their tendered bus services with a view to establishing best practice and better understanding the key drivers of cost increases and how these might be best managed. The research undertaken has sought to identify how value for money could best be achieved in the very wide range of different local circumstances under which supported local bus services are needed.

Structure of the Report

Following this introductory section, the remainder of the Report is structured as follows:

Section two gives an overview of the objectives of the study and the methodology employed;

Section three details the trends in prices and the number of bids for local bus tenders across England and with further detail for the south east;

Section four provides an interpretation of the reasons for the observed trends; and

Section five provides conclusions.