Buses were not considered a major electoral issue under Labour (or indeed under any UK government) so it isn't that surprising that little was done to reverse deregulation. Labour were also trying to shed their socialist image so reversing rail privatisation or bus deregulation would have gone against that.
However, there were (and are) a lot of Labour politicians in their heartlands who were deeply unhappy with bus deregulation so the Transport Act 2000 enabled the creation of Quality Partnerships and Quality Contracts (QCs), which effectively means replacement of deregulation with London-style tendering. Unfortunately, the conditions were QCs were so strict that no authority could meet them, which may well have been what the government intended. Some authorities proposed QCs as a 'threat' to make the incumbent operators improve. For example, when Coventry threatened QCs, Travel West Midlands set up a Travel Coventry brand with service improvements, leading to the council shelving its plans.
The conditions for QCs were relaxed in Transport Act 2008, and some ITAs are starting to develop plans for them, with West Yorkshire's plans advanced furthest. Before the 2010 general election, the Conservatives said they would repeal QCs if they won and advised authorities not to waste time and money preparing for them but as the result was a coalition they have remained in place.
There are still significant barriers to an establishment of a QC. The incumbent operators will likely take the authority to court for confiscation of their businesses. There is also the question of where competing operators will get their depot space from.
The reason for London being spared deregulation has been debated for years but I have not come across a definitive reason.
Northern Ireland has historically been separate from GB in transport terms. For example, the National Bus Company did not cover Northern Ireland. So bringing in deregulation in England, Scotland and Wales would not automatically create legislation in Northern Ireland. Northern Ireland was at the height of the Troubles in the 80s and buses were regularly destroyed so NI got a special bus grant for vehicle replacement. Therefore, buses in Northern Ireland were not profitable therefore deregulation was pointless.
Most of Europe's buses have gone down the tendering route, similar to London, or stayed as state owned companies. So foreign involvement is commonplace. Arriva run lots of buses in the Netherlands and Denmark. Veolia have many Dutch bus franchises and now control the majority of buses in the country after taking over Transdev. But nowhere else has British style bus deregulation.
Even without QCs, deregulation is slowly dying. Deregulation currently survives because there is a captive market that is willing to pay enough levels of bus fare to keep the route viable. This has failed in most of Surrey, for example, because the captive market is too small, possibly due to very high levels of car ownership, high wage costs and poor traffic conditions. Intuitively, America should have bus deregulation, as it is the home of capitalism, low subsidy and the 'free market', but in actual fact buses are heavily subsidised in America with low fares. It would not be possible to deregulate local buses in America because you would end up with no commercially registered services. Most very poor Americans drive so are not captive bus users, whereas very poor people in the UK typically don't drive, so bus companies can rely on their business, no matter how poor the service.