Why are you so worried about the bus companies? You either are in the industry or you have friends there. There's no reason why independent operators can't operate tendered services. I thought they ran a lot of them anyway, especially in the rural areas you mention.
I thought there was nowhere in the world apart from Britain that has deregulation. Is that the case? If so, how can it be impossible to run a bus service that isn't deregulated?
Why am I so worried? Well, I was brought up in the 1970s and remember the regulated world. I was the son of a bus driver and understanding how operations worked appealed to me so I went to university to do a business and transport degree. It was there that I decided that passenger WASN'T the place for me but I have always had a love of how passenger transport works (esp buses) and that hasn't diminished. I still work in the wider transport world and get a lot of insight into local and central government (but I can't really say any more).
And yes, those fresh faced students that I hung around with etc have progressed as we've all got older and indeed, some work for bus companies. They provide some real insight into what actually happens with bus companies, local authorities/PTEs etc. Hope that clarifies and doesn't prove too boring. I'll move away from my CV now
Now you ask why the UK can't be like elsewhere? Well, perhaps had it moved from pre1986 direct to a model that you mention, that might have worked. However, simultaneously, the Tory government was also privatising the National Bus Company. Had they enabled a system whereby a bus company could have lost its whole business overnight, then would the banks have lent those management teams and entrepreneurs the money in which to buy those NBC firms? As well as that risk, it was a government that was absolutely wedded to the power of market forces. A London style framework was against their beliefs. Hence they went for full fat deregulation.
Doing that has meant that a loss of skills and knowledge in the public sector and that has been exacerbated since 2010. Councils and the like just don't have the people with those skills - see Cornwall Council or Nexus.
The 82/86 in Liverpool and 142/143 in Manchester are a LEGACY of the dereg madness. Far too many buses on a couple of routes when parts of Wirral hardly any buses. The city regions need to get out maps of the previous PTE pre 1987 network and plan the network along those lines, redistributing surplus buses to other area which are populated but have lost routes. But the dereg party must be brought to an end. Smaller firms , if any, must fill the gaps through CROSS SUBSIDY.
The fact is that cross subsidy never actually works on a macro level. Yeah, you can run the odd early evening journey to maintain the attractiveness of an entire route but the robbing Peter to pay Paul thing doesn't work. It didn't in the 1970s. It's the fallacy of the average.... As I've said before, if your head's in the oven and your feet in the freezer, then theoretically and on average, you're good. The reality is you're not.
Bus companies, especially nowadays, don't run loads of extra buses on routes to ward off evil competitors. The industry has matured since the days of 1986 when you'd put on loads of buses on key routes to swamp any potential competitor. By reducing the frequency on strong city corridors (where you make money), you reduce the attractiveness of that service (so losing revenue) and you then use those resources on dead duck services in the Wirral. The economics just don't stack up.