[sustran] Re: urban rail and transport problems in KL

[Charlie Richardson]

Alan P Howes wrote:

>
> >
> >Deregulation does not work. It has been a disaster for the UK.
>
> But not entirely there. UK Dereg worked in that it achieved what the
> government wanted - big cuts in subsidy. (OK, they also said they
> wanted to revitalise Public Transport, but if you believed that ...)
> And IMO the public as a whole (including taxpayers) got better value
> for money out of PT after Dereg than before it.



I believe it's necessary to look at little further under the surface to test the
notions that "UK degregulation worked in that it achieved what the government
wanted - big cuts in subsidy." .... and that "... the public as a whole (including
taxpayers) got better value for money out of PT after Dereg than before it."

Whilst it is true that direct subsidies to operators from the UK Dept. of
Transport were reduced following deregulation, it is arguable that different,
indirect subsidies began to apply instead.  Chief among these are the payments
made by the British Dept. of Social Security to bus company staff.  In Britain,
there exists a payment called "Low Income Earner's Supplement" (I think that's the
name of it) which is paid to employed people earning less than a certain amount.
A great deal of this money flows to poorly paid bus drivers and bus company staff
- to the extent that the pamphlet produced by the Dept. of Social Security
explaining people's entitlement to the allowance has a picture of a bus driver on
it.  So, instead of the Dept. of Transport directly subsidising the employers, the
Department of Social Security is subsidising bus company employees.  Is there any
real saving made?  I don't know.  Another aspect to this is that many of the
present bus drivers and other staff are people who did not naturally gravitate to
this kind of work, but were instead forced off the 'dole' into this form of
employment.  I question the wisdom of forcing people who do not wish to be bus
drivers into this kind of work.  It does not suit everybody, it is highly
stressful and there are probably service standard and safety implications to this.

Secondly, many of the services that withered following deregulation are now being
provided with subsidies from local Councils instead of the central government.
Local Councils are funded partly out of their locally derived rates, and partly
from central government.  So, perhaps the budgets have just been shifted around
with no overall saving.

There is a further complicating factor.  It is entirely possible that another form
of subsidy, a very murky one, exists in some of the London operations.  This
subsidy (if that is the right word) derives from the fact that some of the
companies contracted to London Transport to provide services were handed very
large bus depots, with the proviso that they cannot sell them for ten years.
These are very large pieces of land on very valuable real estate.  Looking at the
long term, some of those operators might well be prepared to make a loss on their
operations for the long term gain available from the eventual sale of that real
estate.  In this case, it will have been a subsidy in a non-recurrent form, i.e.
the value of the previously publicly-owned depots.  The ten year freeze on the
sale of those depots must soon be over.  It will be interesting to see what
happens to the services run from  them after that.

Personally, having re-visited London (my birthplace) and other parts of England
after an absence of some years in my new home in Australia, I find that the
services have declined significantly in terms of cleanliness and maintenance of
vehicles and reliability of the services.  Some of that decline in reliability
probably cannot be laid at the feet of the new operators, however, but rather is
the result of increased congestion on the roads due to much increased car
ownership and use.

One aspect of the deregulation of bus services in the UK is very interesting.
That is that while outside of London the services are almost totally deregulated,
it was found necessary to maintain regulation in London - it was just too
important to stuff up.  The contracting companies are told when and where to run
by London Transport, and most of them run on the same routes they have run for
decades.  This provides certainty and stability to the travelling public, to
developers and to business.  Outside of London, people don't know what is
happening .... services are introduced and abandoned at will.

Charlie Richardson  sydtrans at enternet.com.au
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://list.jca.apc.org/manage/private/sustran-discuss/attachments/19991002/2e42d0bb/attachment.htm