The 1985 Transport Act abolished the established entrance control and subsidy allocation systems in the local bus industry outside London and instituted a system whereby operators must register all journeys either as 'commercial services' receiving no subsidy or as 'subsidised services' obtained by competitive tender. This interim report discusses consequences of the Act in eleven non-metropolitan areas in the five months following deregulation. The changes have not been dramatic. Bus networks have been maintained at approximately pre-deregulation levels, although a few service losses in rural areas and at less popular times of travel are reported. Competition between operators has occurred on a minority of routes. Generally, fare levels have been unaffected although there have been some fare decreases on competitive routes and increases on previously cross-subsidised routes. The numbers, and in some cases size, of independent operators have increased although where large operators were previously dominant, this continued. Cost savings are reported by most local authorities and operators although some counties expressed concern that they may not be sustainable. At this stage the implications of deregulation can not be judged in full. However, in the first five months the study areas did not experience major service withdrawals, reductions or price increases. (A)

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