Stagecoach

What was the client issue?

Bus operators in the Tyne and Wear region faced regulation of their business through the imposition of a Quality Contracts Scheme (QCS) by the local authority (the North East Combined Authority, NECA). This would have seen their current commercial freedoms over fares and routes replaced with a system where these things were determined by the local authority, with the operators paid to provide those services. To implement the QCS, the local authority was required to demonstrate to an independent QCS Board that the scheme met five public interest criteria and that the consultation on the QCS was adequate.

How did we help the client solve it?

The public interest criteria made economic analysis the central focus of the case. Oxera assisted Stagecoach by carefully reviewing the economic analysis produced by the local authority, identifying a number of modelling errors and assumptions that were not supported by evidence. Following this review, we supported our client in its representations to the QCS Board and gave expert oral evidence at the hearings.

Why was the outcome compelling for the client?

Oxera's analysis was crucial in identifying where the case advanced by the local authority was not supported by the available evidence and where the local authority had made errors in the modelling. These errors and unsupported assumptions were recognised by the QCS Board, which concluded that the scheme failed three of the five public interest tests and that the consultation on the QCS proposal was inadequate.