CC invites evidence on possible changes to Scottish bus undertakings

29 Nov 2012

The Competition Commission (CC) is inviting evidence on an application by FirstGroup to withdraw one bus service and modify three others in the Glasgow operating area.  

The services are covered by undertakings given by FirstGroup in 2004 to the CC when it took over the Scottish rail franchise. These undertakings include limits on FirstGroup’s ability to make changes to routes and frequencies. The CC has today received advice from the Office of Fair Trading (OFT), which is initially required to review any application to vary undertakings before passing the case on to the CC. The OFT’s advice is that there has been a change of circumstances which may warrant a change to the undertakings.

FirstGroup is requesting that it be allowed to withdraw the 64 service between Carmyle & Glasgow Central as well as modify the 19 (Easterhouse–Glasgow Central), 31 (Glasgow Central–East Kilbride) and 262 (Airdrie–Glasgow Central) services because they are continuing to make a substantial loss. FirstGroup is also seeking a number of other changes to the undertakings so as to change the way in which they are monitored.

The original undertakings were accepted by the CC in October 2004 and followed a CC investigation into FirstGroup’s acquisition of the Scottish rail franchise. The CC concluded that the acquisition, which gave FirstGroup control of local rail and bus services, particularly in Glasgow and Edinburgh, could reduce competition on certain routes and have adverse effects for passengers.

In particular, the CC was concerned that there could be potential for FirstGroup to encourage passengers to switch from bus to rail services by altering service levels and routes. FirstGroup was therefore required to sign undertakings before taking over the rail franchise, which prevented it from altering service levels on a number of local bus services in Glasgow and Edinburgh.

The CC has previously reviewed these undertakings in 2007 (PDF, 113 Kb) , 2011 and 2012.

To comment on FirstGroup’s application to vary the undertakings and the OFT’s advice to the CC, please email Brid.McHugh@cc.gsi.gov.uk or write (by 20 December 2012) to:

Brid McHugh
FirstGroup/ScotRail review of undertakings
Competition Commission
Victoria House
Southampton Row
London
WC1A 4AD

Notes for editors

1. The CC is an independent public body, which carries out investigations into mergers, markets and the regulated industries.

2. The OFT has a duty to keep under review orders and undertakings made under the Fair Trading Act 1973 and the Enterprise Act 2002 and, from time to time, to consider whether, by reason of any change of circumstances, an order and/or undertaking is no longer appropriate. The CC has the power to vary or revoke the orders and/or undertakings. It will now review the OFT’s advice and make a final decision.

3. Enquiries should be directed to Rory Taylor or Siobhan Allen on 020 7271 0242.