An ambitious idea for bus franchising in the UK

[PTR 444]

It’s often been brought up on these forums but the idea of bus franchising seems to be becoming more popular. It solves the issues of fragmented networks and ticketing, routes being pulled at short notice and ‘race to the bottom’ competition on heavily lucrative corridors which are often overbussed. Greater London have for years adopted a similar model where TfL manage all the routes but outsource day to day operations to the private operators, and Greater Manchester have been looking at doing this as well. My idea would go much further than that and create a ‘National Bus Network’ to ensure that every sizeable settlement within the UK has a stable and secure public transportation service.

Unlike London where each route is outsourced to different operators, my plan would behave exactly like railway franchising did pre-March 2020 and divide the UK into dozens of operating areas, with the DfT overseeing the network and private companies bidding for an area. If successful, that operator would then claim all routes in that franchise area. The big question is how to divide those areas…

The easiest way to do it would be for the areas to be based on existing private bus operations, as at the beginning the same companies could operate within their areas and wouldn’t have to bid again for another few years. This does pose some problems though as it will retain the duplicate routes, which ideally I would like removed. For example in Southampton say there was a Southampton City franchise (taking on First City Red) and a Southampton Country franchise (taking on Bluestar), the country franchise would acquire routes that would be much better suited to the city franchise, such as Millbrook - Thornhill and the Unilink routes.

The other way of doing it is to carve up existing operators so they better fit geographical areas and avoid duplicate operators in close vicinity. Following on from the above example, you would have a Southampton City franchise like above, but the Southampton Country franchise would be carved up into separate New Forest, Eastleigh & Winchester, Fareham & Gosport franchises. Although it would lead to fragmentation between existing operators and possibly even a change of operator immediately, it would better reflect local travel patterns and a more efficient allocation of vehicles and staff.

One final point, all branding would need to be non-operator orientated, so no generic First, Stagecoach liveries etc, and reflect the area of operation, so like Buses of Somerset, Lake District etc. Ultimately, the drawing of franchise areas will depend on where the most profitable routes are and how they can be balanced with less profitable ones to allow cross subsidy within operators.

 

[Tom Gallacher]

How would you deal with travel from one franchise area to another?

 

[TheGrandWazoo]

It’s often been brought up on these forums but the idea of bus franchising seems to be becoming more popular. It solves the issues of fragmented networks and ticketing, routes being pulled at short notice and ‘race to the bottom’ competition on heavily lucrative corridors which are often overbussed. Greater London have for years adopted a similar model where TfL manage all the routes but outsource day to day operations to the private operators, and Greater Manchester have been looking at doing this as well. My idea would go much further than that and create a ‘National Bus Network’ to ensure that every sizeable settlement within the UK has a stable and secure public transportation service.

Unlike London where each route is outsourced to different operators, my plan would behave exactly like railway franchising did pre-March 2020 and divide the UK into dozens of operating areas, with the DfT overseeing the network and private companies bidding for an area. If successful, that operator would then claim all routes in that franchise area. The big question is how to divide those areas…

The easiest way to do it would be for the areas to be based on existing private bus operations, as at the beginning the same companies could operate within their areas and wouldn’t have to bid again for another few years. This does pose some problems though as it will retain the duplicate routes, which ideally I would like removed. For example in Southampton say there was a Southampton City franchise (taking on First City Red) and a Southampton Country franchise (taking on Bluestar), the country franchise would acquire routes that would be much better suited to the city franchise, such as Millbrook - Thornhill and the Unilink routes.

The other way of doing it is to carve up existing operators so they better fit geographical areas and avoid duplicate operators in close vicinity. Following on from the above example, you would have a Southampton City franchise like above, but the Southampton Country franchise would be carved up into separate New Forest, Eastleigh & Winchester, Fareham & Gosport franchises. Although it would lead to fragmentation between existing operators and possibly even a change of operator immediately, it would better reflect local travel patterns and a more efficient allocation of vehicles and staff.

One final point, all branding would need to be non-operator orientated, so no generic First, Stagecoach liveries etc, and reflect the area of operation, so like Buses of Somerset, Lake District etc. Ultimately, the drawing of franchise areas will depend on where the most profitable routes are and how they can be balanced with less profitable ones to allow cross subsidy within operators.

Good lord - how many times do we have to go over this one?

Cross subsidy was a disaster from the 1950s to the 1980s and we're seeing history being repeated in London where services in the centre are being cut whilst indulgences in the suburbs are being maintained. Cross subsidy means you deny investment in those services that need it and use it to prop up other services. In the end, those good services don't get the investment required.

And don't think that franchising in London was the main reason for their success in passenger numbers; it was the massive amount of subsidy. There's £2bn of funds available for Bus Service Improvement Plans; the submitted plans (without franchising) amount to £7bn so there's going to be a lot of unhappy local authorities. So the idea of services being pulled at short notice....well, isn't that dependent on the funds available and there's plenty of services being cut in London at the moment?

As for overbussing, Southampton is one of the few areas where any meaningful competition is going on but elsewhere, it is minimal.

 

[PTR 444]

How would you deal with travel from one franchise area to another?

You would be able to use nationwide through ticketing, which of course you cannot do now (in most cases). Basically a bus equivalent of National Rail.

 

[RT4038]

My idea would go much further than that and create a ‘National Bus Network’ to ensure that every sizeable settlement within the UK has a stable and secure public transportation service.

As @TheGrandWazoo has alluded to, franchising by itself would not create this, as funding would be a challenge and have to compete against the other pressing priorities of Local Authorities - particularly social care and education.

The landscape post Covid is probably going to effectively create a franchising model, albeit not threatening too much the existence of the incumbent bus operators (thereby gaining their acquiescence). 'Commercial' bus services will be fairly few and far between. However I suspect this may be followed with a fairly large scale contraction of bus services, as funding will be difficult and pet schemes of individual councillors gain more traction. For example, in the area that I reside, one councillor believes that the only bus services that should be provided are a comprehensive free school bus service and a once per day [in urban areas/couple of times per week in rural areas] facility for the elderly to go shopping/to the surgery etc., with the taxi industry providing for anything else. Another believes DRT is the whole answer. Whilst these are some of the more extreme examples, I can quite see public service being thin or non-existent during school transport times and at weekends, as Authorities seek to save costs and use the same set of buses and drivers to do both. Examples of this on individual routes already exist right across the country.

Be very careful what you wish for, the funding is not there for 'stable and secure', and don't forget that ordinary public bus services are completely irrelevant and therefore expendable to a great many people/voters.

 

[Robertj21a]

Who is paying for all the services required under the franchise?

 

[RT4038]

Who is paying for all the services required under the franchise?

The services required under the franchise may be very thin and not require much paying for?

 

[Robertj21a]

The services required under the franchise may be very thin and not require much paying for?

Yes, maybe but many local areas will want to give an impression of providing 'even better' services for the area. That suggests to me that there will be a fair proportion of rural and less popular routes in the franchise.
Different areas could have wildly different interpretations.

 

[RT4038]

Yes, maybe but many local areas will want to give an impression of providing 'even better' services for the area. That suggests to me that there will be a fair proportion of rural and less popular routes in the franchise.
Different areas could have wildly different interpretations.

Exactly the same question as you posed - where is the money coming from to give this impression of providing 'even better' services for the area? This is all predicated on receiving BSIP (Bus Service Improvement Fund) largesse, which is not guaranteed or in many cases even likely. The Local Authorities have none other spare, and are no doubt going to be extra squeezed by social care and education so they will be seeking savings on their current bus subsidy budget. The Govt. Covid bus recovery grant is ending in April, but bus patronage will unlikely be up to pre-covid levels by then (revenue is only about 70% of pre covid in my area, and 50% of concessionary patronage). Bus companies are going to cut back commercial services and Local Authorities will likely not have the funds to maintain them at present levels, let alone make anything other than a token improvement somewhere. The BSIP fund is wildly over-subscribed, and apparently cannot be used to prop-up the current network anyway.

 

[Tom Gallacher]

You would be able to use nationwide through ticketing, which of course you cannot do now (in most cases). Basically a bus equivalent of National Rail.

Why not just have one company that was responsible for every area then. Would save a lot of admin and allocation of fare revenue for cross franchise area traffic. You could save a fortune by getting all the buses painted in the same colour so transferring vehicles would not be a problem.
You could even call it something catchy - like the National Bus Company - or something similar. and if you really pushed the boat out you could even have a corporate logo.

Could work - you never know.

 

[carlberry]

It’s often been brought up on these forums but the idea of bus franchising seems to be becoming more popular. It solves the issues of fragmented networks and ticketing, routes being pulled at short notice and ‘race to the bottom’ competition on heavily lucrative corridors which are often overbussed. Greater London have for years adopted a similar model where TfL manage all the routes but outsource day to day operations to the private operators, and Greater Manchester have been looking at doing this as well. My idea would go much further than that and create a ‘National Bus Network’ to ensure that every sizeable settlement within the UK has a stable and secure public transportation service.

Unlike London where each route is outsourced to different operators, my plan would behave exactly like railway franchising did pre-March 2020 and divide the UK into dozens of operating areas, with the DfT overseeing the network and private companies bidding for an area. If successful, that operator would then claim all routes in that franchise area. The big question is how to divide those areas…

The easiest way to do it would be for the areas to be based on existing private bus operations, as at the beginning the same companies could operate within their areas and wouldn’t have to bid again for another few years. This does pose some problems though as it will retain the duplicate routes, which ideally I would like removed. For example in Southampton say there was a Southampton City franchise (taking on First City Red) and a Southampton Country franchise (taking on Bluestar), the country franchise would acquire routes that would be much better suited to the city franchise, such as Millbrook - Thornhill and the Unilink routes.

The other way of doing it is to carve up existing operators so they better fit geographical areas and avoid duplicate operators in close vicinity. Following on from the above example, you would have a Southampton City franchise like above, but the Southampton Country franchise would be carved up into separate New Forest, Eastleigh & Winchester, Fareham & Gosport franchises. Although it would lead to fragmentation between existing operators and possibly even a change of operator immediately, it would better reflect local travel patterns and a more efficient allocation of vehicles and staff.

One final point, all branding would need to be non-operator orientated, so no generic First, Stagecoach liveries etc, and reflect the area of operation, so like Buses of Somerset, Lake District etc. Ultimately, the drawing of franchise areas will depend on where the most profitable routes are and how they can be balanced with less profitable ones to allow cross subsidy within operators.

The first thing to note is that the national government has zero interest in buses and wouldn't want to have any part of something like this as they'll get the blame for every late bus/house that hasnt got a bus service and overpriced bus ticket. Also franchising has only been popular in a few areas where the local politicians think they may gain as a result of pursing it, you'll rapidly see them change tune if a national scheme was being suggested!

Also you want to build on rail franchising on the basis that it might work for buses when it hasn't worked for rail. Your reference to 'profitable' and 'unprofitable' routes suggests that you're expecting operators to take the financial risks (the London and Manchester models don't do this), but not allow them any way of expanding the market by innovating (with new routes) or marketing.

Currently routes cant be pulled at short notice (without the local authority agrees) and the 'race to the bottom' ended years ago as did the idea that there are lucrative corridors that are 'overbussed'. The term 'overbussed' is rarely used by bus passengers, but quite often mentioned by people wanting less buses getting in the way of their cars.

 

[RT4038]

Why not just have one company that was responsible for every area then. Would save a lot of admin and allocation of fare revenue for cross franchise area traffic. You could save a fortune by getting all the buses painted in the same colour so transferring vehicles would not be a problem.
You could even call it something catchy - like the National Bus Company - or something similar. and if you really pushed the boat out you could even have a corporate logo.

Could work - you never know.

About as well as last time I should think! ( I don't remember there being less admin or non-allocation of fare revenue then.....)

 

[johncrossley]

London and lots of other places use franchising to save money. In the 90s, London buses ran at break even, whereas the other big cities in the UK required subsidy for their evening and Sunday services.

 

[RT4038]

London and lots of other places use franchising to save money.

To save money compared to direct operation by publicly owned undertakings.

In the 90s, London buses ran at break even, whereas the other big cities in the UK required subsidy for their evening and Sunday services.

What is the source and breakdown of this claim? Break even including all costs, with an assumption of Freedom Pass reimbusement rates at equivalent provincial levels (for your comparative purposes)? Seems unlikely.

The OP is not just talking about big cities. On current information I am expecting 'franchising' to effectively take place across much of the UK. However, the available funds are going to mean very thin services specified in the 'franchises' in many areas. (Franchising = every, or just about all, services in an area being tendered.). However, don't hold your breath for improvements as there will be no funding in many areas for that.

== Doublepost prevention - post automatically merged: 12 Dec 2021 ==

The first thing to note is that the national government has zero interest in buses and wouldn't want to have any part of something like this as they'll get the blame for every late bus/house that hasnt got a bus service and overpriced bus ticket. Also franchising has only been popular in a few areas where the local politicians think they may gain as a result of pursing it, you'll rapidly see them change tune if a national scheme was being suggested!

I don't think this is quite fair; national government is the driver behind the Bus Service Improvement Plan process - the problem is that the sale/cost of making meaningful improvements has probably not been fully grasped. You are quite right that National Government do not want to be prescribing the times of buses or being blamed for poor operations - this quite rightly needs to be devolved down to a local level. However our financial system of local government is a little broken as a result of, in my view, certain local authorities trying to 'take on' national government policies in the Margaret Thatcher era, and ending up with all having their powers attenuated.

 

[Kremlin Stooge]

As other posters have already mentioned, the key to such a scheme outlined by the OP is the dreaded ‘F’-word - funding.

Arguably a success of rail franchising was getting the DfT/Treasury to agree to contractually-committed funding profiles over a 5-7 year period, sometimes longer. It seems very unlikely that those two departments would be willingly ‘bounced’ into similar arrangements for the bus industry.

 

[johncrossley]

What is the source and breakdown of this claim? Break even including all costs, with an assumption of Freedom Pass reimbusement rates at equivalent provincial levels (for your comparative purposes)? Seems unlikely.

https://thredbo-conference-series.org/downloads/thredbo7_papers/thredbo7-workshopA-Matthews-Bristow-Nash.pdf

(pdf)

page 8

Table 5 Subsidy to local bus services (£M,1997/98 prices)

85/86 235
86/87 164
89/90 113
91/92 187
93/94 65
95/96 32
97/98 1

Subsidy cut from £235 million to £1 million.

English metropolitan areas
85/86 363
97/98 98

 

[TheGrandWazoo]

https://thredbo-conference-series.org/downloads/thredbo7_papers/thredbo7-workshopA-Matthews-Bristow-Nash.pdf

(pdf)

page 8

Table 5 Subsidy to local bus services (£M,1997/98 prices)

85/86 235
86/87 164
89/90 113
91/92 187
93/94 65
95/96 32
97/98 1

Subsidy cut from £235 million to £1 million.

English metropolitan areas
85/86 363
97/98 98

Erm... I'm not quite certain what you're attempting to prove.

If it was that London Transport in the 1970s and 1980s was a grossly inefficient, high cost operation and that costs were massively reduced during the initial move to franchising by the eroding of drivers terms and conditions of employment (see Bexleybus, Harrow Buses, London Forest) etc, then that is true.

However, those savings have all been realised around the UK so there is no cost benefit to be realised from franchising. And that to have a London style bus network was costing c.£750m in subsidy even before Covid came calling.

 

[johncrossley]

Erm... I'm not quite certain what you're attempting to prove.

If it was that London Transport in the 1970s and 1980s was a grossly inefficient, high cost operation and that costs were massively reduced during the initial move to franchising by the eroding of drivers terms and conditions of employment (see Bexleybus, Harrow Buses, London Forest) etc, then that is true.

However, those savings have all been realised around the UK so there is no cost benefit to be realised from franchising. And that to have a London style bus network was costing c.£750m in subsidy even before Covid came calling.

The point is, they managed to maintain 1980s levels of usage with no net subsidy. Everybody talks as if franchising means spending a fortune. Theoretically franchising can even mean making money for the taxpayer. Even before TfL London bus fares were lower than outside London. So it may well have been possible for London Transport to make money by having a high fares policy in the 90s. Deregulation in London would have *cost* money for the taxpayer in the 90s, as the loss making routes would have to be tendered out, instead of the cross subsidy that London Transport did so that it could be run at break even.

It is clear that in future buses will require large levels of subsidy, otherwise there will be few, if any, bus services. So the choice is either a 'partnership', which is a euphemism for giving the incumbents a blank cheque, which is not too dissimilar to pre-deregulation block grants, or using tendering to drive down costs.

 

[Robertj21a]

It seems to be easily overlooked that London can achieve good figures simply because of the tremendous numbers travelling. If I recall correctly, the 2nd busiest bus operator in England is Brighton & Hove - another exceptional operation. These volumes travelling, per bus, is way ahead of most other operators.

 

[TheGrandWazoo]

The point is, they managed to maintain 1980s levels of usage with no net subsidy. Everybody talks as if franchising means spending a fortune. Theoretically franchising can even mean making money for the taxpayer. Even before TfL London bus fares were lower than outside London. So it may well have been possible for London Transport to make money by having a high fares policy in the 90s. Deregulation in London would have *cost* money for the taxpayer in the 90s, as the loss making routes would have to be tendered out, instead of the cross subsidy that London Transport did so that it could be run at break even.

It is clear that in future buses will require large levels of subsidy, otherwise there will be few, if any, bus services. So the choice is either a 'partnership', which is a euphemism for giving the incumbents a blank cheque, which is not too dissimilar to pre-deregulation block grants, or using tendering to drive down costs.

But as explained, and it's clearly stated in the report that you reference, London was only done so because there was a much higher starting point in costs - the operations were so grossly inefficient/expensive that this was achievable.

And, of course, that isn't going to be the case in rolling out franchising now - the ability to strip cost out has gone. Instead, a franchising regime will need management and so add cost in. The other way from partnership is to have local authorities take steps to temper private car use (e.g. removing or reducing on street parking, removing the free or discounted parking offers), improving bus priority etc. And of course, they could do that NOW...

 

[RT4038]

https://thredbo-conference-series.org/downloads/thredbo7_papers/thredbo7-workshopA-Matthews-Bristow-Nash.pdf

(pdf)

page 8

Table 5 Subsidy to local bus services (£M,1997/98 prices)

85/86 235
86/87 164
89/90 113
91/92 187
93/94 65
95/96 32
97/98 1

Subsidy cut from £235 million to £1 million.

English metropolitan areas
85/86 363
97/98 98

Even the authors of the study are a little sceptical (bottom of Page 7) The reductions in the English Metropolitan Areas have been relatively gradual, whilst the reductions in London, during the mid-late 1990s in particular, are quite remarkable and would merit further, separate investigation.

Before I believed such numbers I would want to be looking very closely at the revenue ( particularly Freedom pass and Travelcard calculations) to see if they really are 'like for like' to the provincial areas, and also what exactly was included in the costs.

It is clear that in future buses will require large levels of subsidy, otherwise there will be few, if any, bus services. So the choice is either a 'partnership', which is a euphemism for giving the incumbents a blank cheque, which is not too dissimilar to pre-deregulation block grants, or using tendering to drive down costs.

I am not sure the 'partnership' route is going to be quite like that. Certainly not any blank cheques. As @TheGrandWazoo points out in post #20, there is not much in the way of costs going to be driven out, which are not going to be replaced with increased administration costs in one way or another.

What is a much larger concern is that the services contained within the 'Franchises cum partnerships' are likely to be much thinner than pre-Covid, due to funding issues. It is not clear that in future buses will require large levels of subsidy - there may just be far less buses!

 

[Meerkat]

The first thing to note is that the national government has zero interest in buses and wouldn't want to have any part of something like this as they'll get the blame for every late bus/house that hasnt got a bus service and overpriced bus ticket.

That's clearly not true as they recently published a Bus Strategy, and the enthusiastic forward for it was by the Prime Minister himself (mentioning how he likes models of buses) rather than just the Transport Secretary.

 

[carlberry]

That's clearly not true as they recently published a Bus Strategy, and the enthusiastic forward for it was by the Prime Minister himself (mentioning how he likes models of buses) rather than just the Transport Secretary.

If the government had any interest in buses they wouldn't let local authorities anywhere near them. Boris will say anything that makes him look good, mostly it has no connection with reality or the truth!

 

[Bletchleyite]

If the government had any interest in buses they wouldn't let local authorities anywhere near them. Boris will say anything that makes him look good, mostly it has no connection with reality or the truth!

It is quite right that "he who pays the piper calls the tune". You are at liberty to operate a commercial bus service without involvement by LAs other than in pass reimbursement (though the mind boggles as to why there isn't a national formula for that).

I would agree competence can be poor, but they are paying, so they decide how the money is spent. It cannot possibly be otherwise, at least in some form, and it is ludicrous to suggest that private bus companies are responsible enough just to be given a blank cheque and spend it how they wish.

 

[Meerkat]

If the government had any interest in buses they wouldn't let local authorities anywhere near them. Boris will say anything that makes him look good, mostly it has no connection with reality or the truth!

You said the government has no interest in buses. If that was true they could have not bothered with the strategy, and bearing in mind how few people are going to read it there are next to no votes in Boris writing the forward rather than leaving it to the Transport Secretary and staying well clear.

 

[Kremlin Stooge]

...it is ludicrous to suggest that private bus companies are responsible enough just to be given a blank cheque and spend it how they wish.

I’m not sure I’ve seen anyone suggest such a proposal in this thread.

The point remains though, that franchising or concession-letting or other model which is subject to annual spending reviews will not deliver any more network continuity/stability than we currently have. The scheme described in the OP will only have a chance of success if (a very big if) the national/local government bodies agree to a “contractually-committed funding profile” over a 5 to 10 year period - pick timescale of choice. The “contractually-committed” aspect is important to both parties, one party agrees to pay in return for the other party delivering its ‘deliverables’; no-one will be getting a blank cheque to spend how they wish.

But this requires a huge change in mindset from those with power over the national and local purse-strings.

The ‘F’-word will not go away...

 

[RT4038]

I’m not sure I’ve seen anyone suggest such a proposal in this thread.

I think post #18 is suggesting that Enhanced Partnerships are a euphemism for this 'blank cheque' which is not too dissimilar to pre-deregulation block grants.
Not that the pre-deregulation block grants were quite like that!

== Doublepost prevention - post automatically merged: 13 Dec 2021 ==

I’m not sure I’ve seen anyone suggest such a proposal in this thread.

The point remains though, that franchising or concession-letting or other model which is subject to annual spending reviews will not deliver any more network continuity/stability than we currently have. The scheme described in the OP will only have a chance of success if (a very big if) the national/local government bodies agree to a “contractually-committed funding profile” over a 5 to 10 year period - pick timescale of choice. The “contractually-committed” aspect is important to both parties, one party agrees to pay in return for the other party delivering its ‘deliverables’; no-one will be getting a blank cheque to spend how they wish.

But this requires a huge change in mindset from those with power over the national and local purse-strings.

The ‘F’-word will not go away...

Quite. But this is highly unlikely.

 

[Kremlin Stooge]

But this is highly unlikely.

No disagreement from me, I just raise issues like this, along with wider general planning policies around housing, shopping and business park developments, to try and highlight the steep political cliff-face the industry faces.

Regarding the block grant, I can remember that being something of a financial rug under which all kinds of loss-making dust could be swept...

 

[RT4038]

Regarding the block grant, I can remember that being something of a financial rug under which all kinds of loss-making dust could be swept...

Maybe, but they weren't a blank cheque by any stretch of the imagination. Many a service cut was made due to block grant reduction or failure to increase. Local Authorities had full access to the relevant parts of the NBC standard costing system and could precisely see the financial performance of services. As with any costing system things could be 'swept under the rug' as you put it but so can they now!!