Opening the Dublin bus network to private competition based on the London model is well worth considering, but public funding will still be required, writes Aengus Collins
If you stand at a London bus stop, you can see the outward signs of competition on the network. Different companies handle different routes, so a range of vehicle types, company logos and shades of red pass by throughout the day.
But as far as the passenger goes, that's about the extent of the private sector's visibility. All the trappings of the bus system - the fares, the stops, the timetables, the maps - are standardised across the city. Apart from the actual buses themselves, everything bears the hallmarks of central provision so people still see London's buses as a collective entity rather than a set of isolated private sector fiefdoms.
But that had always been the objective. London's competitive tendering model - which the Government proposes to introduce to Dublin - was never supposed to usher in a deregulatory free-for-all. On the contrary, it was intended to be a system of heavily regulated private sector involvement. Those who argue that Dublin's buses stand on the edge of a laissez-faire precipice will not find their theory confirmed in London.
The city's bus routes were opened to competition gradually from the middle of the 1980s. The process began with the 1984 London Regional Transport Act, which placed London Transport - the agency responsible for London's buses - under the direct control of central government, and which initiated a programme of competitive tendering whereby private sector operators and the existing public sector bus company competed for contracts to run individual routes around the city.
For every route, a tender specification was drawn up by London Transport, detailing the required vehicle capacities, service frequencies and the streets and stops the route was to include. Companies then made sealed bids on the basis of this specification, and, in general, the lowest bidder would be awarded a three year contract, subject to continuous monitoring to ensure that the terms of the specification were met throughout that three year period.
Competition produced cost savings of around 18 per cent on tendered routes, reflecting improved productivity and lower wages. But while costs decreased across the system, research shows that services improved. One reason for this was that the money saved by London Transport was spent on widening and improving the range and quality of services. More importantly, the winners of the new tender contracts had a real incentive to meet their targets because those who failed to do so risked having their contracts terminated.
In the years following the introduction of competitive tendering, government subvention of London's buses dropped significantly. However, since the election of Ken Livingstone as London's mayor in 2000, the level of public spending on the city's bus system has risen sharply. In 2001/02, a £200m government transport grant was required to bridge the gap between fare receipts and the cost of providing London's bus services. One central government forecast predicts that this figure will rise to £500m by 2004/05. The mayor's office predicts an even steeper increase.
This hike in London's transport grant reflects Livingstone's ambitious and high-profile attempt to improve the quality of London's bus network. Already, the number of buses on the streets has increased, better vehicles have been introduced and fares have been simplified and frozen to encourage passengers to switch to buses. Other initiatives include a digital display system at bus stops to tell you where the next bus is, and simple but remarkably handy maps of nearby bus routes placed all around the city.
London's recent experience goes a long way to support the view that there is no quick-fix way to avoid investing public money in a city's transport infrastructure. Livingstone has clearly demonstrated the pivotal importance of creative strategic planning backed up with public money. But it is telling that he has not sought to move away from the involvement of private operators on the network. Rather, he has placed a much stronger emphasis on the quality-of-service elements of the tender specifications he draws up.
London's mayor is no friend of the private sector (he opposes the British government's plans for private sector involvement with the London Underground) but the competitive tendering model offers him the best of both worlds. Control of the bus system remains in his hands, while the delivery of the services he specifies has been out-sourced to companies who, by common consent, have been more cost-efficient at providing them.
Involving the private sector in London's bus network hasn't removed the need for public money, and Seamus Brennan may well take fright at Livingstone's forecast that London's buses will require over £1 billion in public funds in 2008/09. But there have been cost savings, with no ensuing loss of control or accountability, and these savings have contributed to improvements in service since tendering began.
Aside from savings, however, the competitive tendering model also allows a redirection of public sector activity. Delegating much of the donkey-work on the bus system to private sector companies is one of the factors that gives Livingstone's office the time to devote to the implementation of a long-term strategy for the buses. Bringing in the private sector has freed up public sector resources that are now being more usefully deployed in other ways.