First Devon & Cornwall cuts and profiteering from deregulated bus services

Circular No. NP/0255/13

30th September 2013


Dear Colleagues,

First Devon & Cornwall cuts and profiteering from deregulated bus services

I am writing to highlight First Devon and Cornwall’s further attacks on bus services and jobs, and the bus industry’s targeting of deregulated bus services to boost their profits.

Following on from the closure of the Barnstaple depot and complete withdrawal of services in North Devon in July this year, First announced in September plans to cut routes and services to and from Plymouth and across Cornwall. This will lead to job losses and increased isolation for passengers, particularly pensioners, people with disabilities and young people living in isolated parts of Devon and Cornwall.

First Group made £90.7m from UK buses in 2012-13, out of £335m in total operating profits. The company currently enjoys a 21% share of the £4 billion (per year) deregulated UK bus market and could easily afford to continue these bus services in Devon and Cornwall but because it is deregulated, they can cut and run from less profitable routes.

The union will continue to fight against First and other bus companies’ profiteering from bus services. As part of this, RMT has submitted additional written evidence to the Transport Select Committee inquiry into passenger transport in isolated communities highlighting the impact that First’s cuts will have in Devon and Cornwall. A copy of this evidence will be placed on the RMT website and the union’s main points are:

•    First Group’s cuts to jobs, routes and services on its less profitable services, such as First Devon & Cornwall, illustrate that passengers in isolated communities are most likely to lose their remaining bus services in the drive for corporate profit amongst private bus operators.

•    The decision of First Group to sell off its stake and assets in the regulated London bus market demonstrates that transport multinationals see the deregulated market as their prime source of profit from UK bus operations. This leaves passengers in isolated communities especially vulnerable to losing bus services.

•    In their latest annual reports, two of the big five transport companies, Go Ahead and First Group, are openly targeting the deregulated bus market which serves isolated rural communities in order to maximise profits. Go Ahead’s stated aim on regulated and deregulated buses is £100m profit by 2015-16 – they made £78.2m in 2012-13.

•    The largest operator in the de-regulated market, Stagecoach derived 64.4% (£165m) of its total operating profit from deregulated UK bus services. RMT believe that this makes passengers in rural areas particularly vulnerable to bus cuts.
I would be grateful if you could bring the content of this circular to the attention of members and I will keep you updated on the union’s ongoing campaigns against private profit in the bus industry.

Yours sincerely

Bob Crow
General Secretary