Bus deregulation

Bus deregulation in Great Britain was the transfer of operation of bus services from public bodies to private companies as legislated by the Transport Act 1985.

In the early 1980s much of the British bus network was in public ownership, either by the state owned National Bus Company or by municipal owned bus operators. It was regulated with operators not subject to competition.

The Thatcher Government commissioned a white paper into the bus industry. This resulted in the implementation of the Transport Act 1985 on 26 October 1986 and the deregulation of bus services in England, Scotland and Wales. Deregulation did not apply to London Buses which in April 1989 was split into 11 quasi-independent companies that were privatised in 1994/95.

The Act abolished road service licensing and allowed for the introduction of competition on local bus services for the first time since the 1930s. To operate a service all an accredited operator was required to do was provide 56 days' notice to the Traffic Commissioner of their intention to commence, cease or alter operation on a route.

Almost immediately existing operators faced competition on their most profitable routes, both from new and existing operators, and other municipal operators seeking to increase revenue. This would often result in the incumbent operator retaliating by starting up operations on the new operator's home turf. Tactics included cutting fares and operating extra services.

It also provided for the privatisation of the National Bus Company which was divided into 70 separate legal entities and sold, with the sale of National Coach Holidays to Shearings in July 1986 the first. Many were sold in management buyouts, including some 24 which introduced employee ownership in the form of . However they quickly began to be bought out by transport companies Arriva, First, Go-Ahead, National Express and Stagecoach.

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