The 1985 Transport Act deregulated bus services in Great Britain outside London. The Act was designed to increase competition between bus operators, both on the road and for contracts to operate socially necessary services. The Metropolitan County Councils were abolished in April 1986, just before deregulation took effect in October 1986. This report describes the effects of both these changes in legislation on Merseyside up until the end of 1987. The effects are analysed from the point of view of each of the major parties involved, namely the policy makers (the government and the Passenger Transport Authority), the Passenger Transport Executive, the bus operators and the passengers. The total bus mileage on Merseyside did not change significantly. Bus operators were expecting subsidy to be reduced and increased fares dramatically. Public transport subsidy was reduced by 27M per annum. This has to be set against an additional 20M per annum being paid in higher fares and the loss of mobility represented by the reduction of some 100M trips per annum. There was very little competition between operators initially, although this grew over the first year of deregulation. A number of new operators entered the market, and after a year these provided 6 per cent of the commercial and tendered mileage in the area. Concessionary fares and area-wide travel cards have been maintained. Patronage fell by about one third. While about half of the loss of patronage can be attributed to the fares increases, the rest of the passengers were lost as a result of the instability of the network which was compounded by problems of unreliability and the provision of up-to-date timetable information. (A)

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