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Cross-subsidy

9th April 1983, Page 21
9th April 1983
Page 21
Page 21, 9th April 1983 — Cross-subsidy
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Which of the following most accurately describes the problem?

CROSS-SUBSIDY has an important role in keeping many bus services running. By taking money from a profitable service and subsidising an unprofitable service, the National Bus Company manages to maintain a nationwide coverage.

Speaking to the House of Commons transport committee inquiry into bus subsidies, Lord Shepherd, chairman of NBC, explained the difficulties of crosssubsidisation when bus services are introduced to rival the NBC profitable services.

Such competition reduces NBC's profits and so less crosssubsidy takes place, he said. And unless the county councils raise their revenue support to compensate for that loss, the nonprofitable services have to be withdrawn. West Cumbria is a prime example of this.

Lord Shepherd said that bus revenue support could be minimised if a "comprehensive co-ordination agreement" could be reached by NBC subsidiaries and other bus service undertakings.

The public would benefit from the better potential use of resources, he pointed out. Better co-ordination on a wider range of local transport could also be achieved. School bus services and non-emergency ambulance services should be included in the consideration of local transport so that a more efficient use could be made of the resources available.

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Organisations: House of Commons
People: Shepherd

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