A GOVERNMENT Quango has produced a report that states bus and rail fares in Cheshire could increase after Arriva was awarded the franchise to operate trains on the Mid Cheshire line.

A group of independent panel members at the Competition and Markets Authority (CMA) has investigated whether Arriva’s ownership of certain overlapping rail and bus services may lead to higher fares as a result of reduced competition.

In December 2015, the Department for Transport awarded the Northern franchise to Arriva Rail North Ltd (ARN), a subsidiary of Arriva plc, following a competitive tender. ARN began operating the franchise on April 1, under terms agreed with the CMA, with a commitment to delivering significant benefits to passengers over the next nine years.

The CMA's provisional finding is that there is a substantial lessening of competition (SLC) on four rail routes in the north, including the Mid Cheshire line that operates from Manchester to Cheshire, via Knutsford and Northwich.

The report outlines the measures the CMA might take if it still believes the franchise award could substantially lessen competition on the routes identified when a final decision is taken.

These remedies include caps on bus and rail fares for the affected routes.

Phil Evans, inquiry chair, said: "We assessed the franchise award thoroughly and have provisionally found that it could lead to higher fares for passengers on some local rail and bus services in the North of England, which would be significant for consumers using these services.

"However, we have not identified competition concerns arising from this merger on most routes and we recognise Arriva’s commitment to bringing a range of benefits through the Northern rail franchise to passengers, such as better trains and improved customer service. Our remedies will protect passengers in the relatively few local areas where we have identified competition concerns.

"We are now inviting responses to our provisional findings and remedies notice, and will continue to assess all the evidence before we make our final decision."

But Chris Burchell, managing director of Arriva UK Trains, said the firm had insisted that the new franchise did not create any competition concerns and it was 'disappointed' with the reports findings.

“We are pleased that the CMA in their provisional findings have recognised Arriva’s commitment to bringing a range of benefits to passengers through the Northern rail franchise, including through better trains and improved customer service," he said.

“We have maintained throughout this process that the operation of the Northern franchise by Arriva alongside our existing bus and rail businesses does not create any competition concerns and so we are disappointed that the CMA has identified a small number of these in a handful of local areas.

“This remains an on-going process and Arriva is committed to continuing to engage constructively with the CMA to resolve their concerns and demonstrate that the award of the Northern rail franchise doesn’t lessen competition.

“We remain fully committed to delivering our transformational plans for the Northern franchise for the benefit of all our passengers.”

John Oates, chairman of the Mid Cheshire Rail Users Association, told the Guardian he did not believe there would be a lessening of competition.

"Northwich to Altrincham is no competition as there are buses a day and it's Arriva but tendered by Cheshire East Council," he said.

"Then there is Knutsford to Altrincham via Wilmslow which is every 30 minutes and is currently run on a temporary contract by Cheshire East but the train takes 15 minutes and the bus takes an hour, so I don't see that as competition.

"Northwich to Chester is the 82, which was a GHA service but now operated by Arriva on a temporary contract until November so who knows what will happen after that.

"I find the findings (in the report) strange, from a passengers point of view I just don't see it."

The CMA's final report is expected by November 3.