OFFICE OF FAIR
TRADING News Release (24/09) issued by COI News Distribution
Service. 5 March 2009
The OFT has today
launched a market study into the supply of local bus services.
This sector has become increasingly concentrated by takeovers,
with nearly two-thirds of services now controlled by five large
operators. The study will consider whether concentration in the
market has a positive or negative impact on the prices consumers
pay and the services they receive, and whether or not there is
competition between operators bidding for tendered services. John
Fingleton, OFT Chief Executive, said:
"The OFT receives regular complaints about bus prices,
service levels and a perceived lack of competition between
companies bidding for tenders. At the same time many claim that
even where there is competition it has failed to deliver
improvements in local bus services. The study will test these
issues against the available evidence."
Initially the market study will focus on gathering and analysing
data to help build a picture of how competition in the local bus
sector works. The OFT will work with local authorities, bus
operators and central and devolved government to collect
information on the different models of competition in operation in
local areas. The final duration and scope of the study will depend
on the results of this initial phase.
The OFT will be contacting key parties directly. Other
interested parties can submit written views, by 8th May 2009 to:
Email: localbusmarketstudy@oft.gsi.gov.uk
Post: Local bus services market study, 2C/3, Fleetbank House, Salisbury
Square, EC4Y 8JX
NOTES
1 A decision may be taken to end the study after the initial
phase, with the findings being used to inform the OFT's
mergers programme and by local authorities when tendering for
local bus services. The OFT could also continue with further work
including, for example, more in-depth analysis of the state of
competition and the drawing-up of detailed recommendations. If the
study does proceed to a second phase, the OFT intends to complete
it before the end of 2009.
2 Updates to the timetable for the study will be published on our
website at http://www.oft.gov.uk/buses
3 OFT market studies are carried out under section 5 of the
Enterprise Act 2002 (EA02) which allows a market-wide
consideration of both competition and consumer issues.
4 Market studies involve an analysis of a particular market with
the aim of identifying and addressing any aspects of market
failure from competition issues to consumer detriment and the
effect of government regulations. Possible results of market
studies include; enforcement action by the OFT; a reference of the
market to the Competition Commission; recommendations for changes
in laws and regulations; recommendations to regulators,
self-regulatory bodies and others to consider changes to their
rules; campaigns to promote consumer education and awareness;
'a clean bill of health' for the industry.
5 The OFT is unable to provide advice or resolve individual
complaints for consumers. Consumers can seek advice from Consumer
Direct (tel: 08454 04 05 06, http://www.consumerdirect.gov.uk).
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk
OFT
reports and consumer information leaflets are available free
from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.uk.com