| abstract
| - Bus deregulation in Great Britain came into force on 26 October 1986, as part of the Transport Act 1985. The 'Buses' White Paper (under the Conservative government of Margaret Thatcher) was the basis of the Transport Act 1985, which provided for the deregulation of local bus services in the whole of the United Kingdom except for Northern Ireland and Greater London. It proposed the abolition of road service licensing and allowed for the introduction of competition on local bus services for the first time since the 1930s. Two kinds of bus service can be provided: commercial and subsidised. Any bus operator can run whatever commercial services it wants to as long as it gives 56 days notice of an introduction of a new service, withdrawal of a service or timetable changes. Commercial services are those provided without any subsidy (except for the provision of concessionary fares and the mileage-based subsidy which offsets most fuel duty) and there are no restrictions on fares. There is no need for an operator to cross-subsidise services under deregulation. Cross-subsidy (where the profits from better paying services are used to pay for unprofitable routes) was an essential part of the previous regulated system. Despite this, operators sometimes cross-subsidise to maintain a network at all times of the day so to keep customer loyalty or so to maintain the attractiveness of that company's travelcard (one which is only valid on that operator). If there are gaps in the commercial bus network, local authorities (in shire counties) and PTEs (in metropolitan areas) are able to design bus services which bus operators can be paid to operate. These are routes which the local authority or PTE considers as socially necessary, but are not commercially viable. The fares, routes and times of these subsidised services are set by the local authority or PTE. However, local authorities and PTEs are normally required to seek competitive tenders for these services. Subsidised services in urban areas (also known as tendered services) are often evening, early morning or Sunday journeys on routes which are commercial during the day on Monday to Saturday. Many rural routes and some urban routes are subsidised at all times of their operation. Initially, most local authorities made significant savings by seeking tenders for subsidised services, but increased costs in the industry, together with falling patronage, has resulted in increasing bills for subsidy. The law now allows for 'Quality Partnerships' between local authorities and operators, where an operator agrees to improve a service, in return for infrastructure improvements paid for by the local authority (usually bus lanes or bus stops/shelters). Such partnerships do not normally allow the local authority to set fares or service frequencies.
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