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Bus firms facing investigation

BRITAIN’S big five bus firms are facing a probe over concerns that limited competition is driving up fares.

The Office of Fair Trading (OFT) is asking the Competition Commission to investigate the industry after finding that a distorted market was causing higher prices and poorer services.

The probe is likely to hit firms such as Arriva, FirstGroup, Stagecoach, Go-Ahead and National Express.

The investigation will not affect London buses, where Transport for London sets fares and routes.

The OFT found that a small number of large companies were running most local bus services.

In particular, it highlighted the potential for market exploitation in areas dominated by a single company.

A OFT spokeswoman said the study found several issues that could prevent, restrict or distort competition.

“One of the concerns we think the Competition Commission should look at is the tendency for local areas to become dominated by a single operator,” she said.

The Conservatives controversially privatised and de-regulated the UK’s bus services outside London in 1986.

Ministers said it would bring better services and lower fares, but critics say companies have axed rural, evening and weekend services and targeted the most profitable routes.

Arriva said there was lively competition between firms. “Our biggest rival is the car,”?a spokesman said.

FAST FACTS | OFT BUS PROBE

• At least £1.2bn of public money goes towards supporting local bus services each year.
• In a quarter of cases, there is just one bidder when local authorities put taxpayer-funded bus services out to tender, the watchdog found.