Competition in long distance public transport in Great Britain

Britain completely deregulated long distance coach services in 1980 and introduced competition for long distance rail services through competitive tendering for franchises in 1994–7, having completely separated infrastructure from operations. Open access competition in rail is restricted to services which generate new rail traffic rather than simply abstracting from franchised services. Coach competition has generally led to improved services and lower fares, although remarkably the company remains dominant that was dominant pre deregulation. A number of problems occurred with rail franchising, including increased costs, unrealistic bids, complex fare structure and inefficient or unworkable timetables. As a result, it has been decided to re-integrate track and trains in a new government owned company, Great British Railways. It was originally proposed that whilst Great British Railways would set fares and timetables and take over revenue risk, actual operation of the services would still be contracted out. This would reduce the role of competition to seeking to reduce costs. Now it has been decided that all franchises let by Central government will be brought back in house and operated directly by Great British Railways as the current franchises expire. Open access competition has been very limited, mainly offering through services from London to places poorly served by the franchisee, but in one case seeking to generate new traffic by means of a low cost operation taking traffic from low cost airlines. But given that loss of revenue by the incumbent will always have consequences in terms of increased subsidies, cuts in services or increased fares somewhere in the system, the British approach seems to be a sensible way of balancing these costs against the benefits of open access competition.