Monday, 17 January 2011

Buses, and the point of public services

The local County Council has had a major budget cut from central government. Part of dealing with this involves reducing or removing the subsidy they provide for certain services which would not be commercially viable.

While they say that this does not necessarily mean the service will be withdrawn, both of the major bus operators have said that they cannot afford to continue more than a few of the services without a subsidy.

Sunday services and evening services are facing the majority of the cuts, mainly in rural parts of the county.

There are two things related to this that I want to draw attention to, and they apply to all sorts of cuts that the government is making or requiring local councils to make.

Firstly, as reported in the local free paper:

About a fifth of all bus services in the county are not commercially viable. But the council believes more than 95% of bus passenger journeys would be largely or entirely unaffected by the cuts.

Obviously most passenger journeys are not going to be affected. Most journeys are made on busy routes, which don't need a subsidy. The point of public subsidy of bus routes - and indeed public funding of many things - is to make affordable services that would not be possible on a pure market model, but which are necessary to many people. To say that most journeys will be unaffected is true, but not relevant.

Lots of people who rely on the bus services to get about are going to find their movement restricted, and that leads on to the second point: cuts to public services have a knock-on effect on the private economy.

We're told by the government that public spending is preventing private spending. Well, in this case that's clearly not true - it's not as if there would be private operators on these routes without the public subsidy: the private operators have said so themselves.

But furthermore, this public subsidy helps private spending. Cut the evening services, and people won't be able to get into the urban centres of the county then - or won't be able to get out later without spending several times the cost of a bus ticket on taxi fares.

So people going into towns in the evening for the nightlife are a bit stuck, as are people who go into town to work in the pubs and clubs providing that nightlife, or in other evening shift jobs in shops where they clock off after 8pm when many services are being withdrawn or cut back. The local private economy takes a dip as a result.

They could get a car and travel that way, but that's a large cost to themselves so won't be practical for a lot of people who were relying on the buses before, and it also increases congestion and exacerbates the lack of parking in town centres, which makes things worse for everyone. And, of course, having got the car, they then don't need the bus to get around on weekday mornings and afternoons either, so that's fewer bus passengers, and perhaps some of the more borderline unsubsidised bus routes start to slip out of profit too.

Reduced private expenditure leads to reduced tax revenue, so the whole cycle starts again.

By supporting necessary but not commercially viable services, public funding helps both the public and private sector, both of which are likely to take severe damage in the next few years.