Why do so many local authorities want to introduce bus franchising instead of municipal operators.

[edwin_m]

Lancashire council leaders react to local government shake-up

As Lancashire's 15 authorities will merge into four, council leaders give their reactions.

www.bbc.co.uk

Under the changes Blackpool, Fylde and Wyre will form one council, while Preston, Lancaster and Ribble Valley will join together in another.

Chorley, South Ribble and West Lancashire are set to merge into a single authority.

So the whole of the tramway will be within one authority boundary. The Lytham-St Annes area will still be separate from Blackpool.

Presumably the new council will inherit the assets of Blackpool Council, including the transport company.

 

[Man of Kent]

So the whole of the tramway will be within one authority boundary. The Lytham-St Annes area will still be separate from Blackpool.

Lytham and St Annes are in Fylde, which as the other part of the message stated:

Under the changes Blackpool, Fylde and Wyre will form one council

So it will now all be in a single council area, including the rural hinterland to the east of Blackpool.

 

[edwin_m]

Lytham and St Annes are in Fylde, which as the other part of the message stated:


So it will now all be in a single council area, including the rural hinterland to the east of Blackpool.

Apologies, misunderstood the map in the linked article. Post now corrected.

 

[JohnofWessex]

The local 'Round Town' bus services in Frome funded by The Town Council are split between a private operator and Somerset County Council who won the tender for one route after th eprivate operator dropped out due to staff shortages

 

[Magrar]

The reason seems pretty obvious to me.

A municipal operator is a monopoly. It hands far too much power to the unions.

Look at Khan, allegedly the most far left Labour politician out there with bus powers. Talk of taking back control of London's buses is just that. He's happy to persist with route tendering even as the pool of bidders has dwindled to a handful.

I'm quite sure by now, there are effectively no benefits to London route tendering, once you factor in the costs of managing the bureacracy required. And yet for some bizarre reason, it was the largest London operator that was the only new entrant to the Manchester scene when franchised. Why? Burnham had no other choice. Who else knows how to navigate a "London style" bidding process, other than those who are cleaning up out of being the middle man between London bus drivers and the London Mayor's bus managers? All under the watchful eye of a man whose father drove buses as a direct employee of the municipality of Londinium.

There is also clearly a lingering fondness within Labour for the principle of competition driving down costs. They still do not accept the argument that the only way an employee providing a public service will truly serve that public to the very best of themselves, is if they are quite literally being directed and rewarded by the duly elected representatives of that public.

All the other reasons don't really wash. They are excuses, easily overcome. The power of a single union holding all the cards in a bus strike, not so much.

it's not an accident I don't think, that the least known aspect of Mayor Burnham's bus network, now Prime Minister Burnham, is that his bus drivers are still employees of private multinational transport conglomerates. As they have been since the patchwork of privatised operators, many actually owned by their employees in part, were hoovered up into a handful of big groups.

 

[mangad]

Look at Khan, allegedly the most far left Labour politician out there with bus powers. Talk of taking back control of London's buses is just that. He's happy to persist with route tendering even as the pool of bidders has dwindled to a handful.

That said, TfL have been looking at creating a publicly owned operator. Now whether it comes to pass is another matter. And TfL previously had an in-house operator that was then sold off when Johnson was mayor. Which is always one of the challenges of these things - some politicians are ideologically opposed to the public sector doing anything. If a big public sector operator was created, what is there to stop a different administration selling it off? Franchising and route tending does fit in a middle ground that seems to work for most politicians.

 

[Mark L]

The reason seems pretty obvious to me.

A municipal operator is a monopoly. It hands far too much power to the unions.

Look at Khan, allegedly the most far left Labour politician out there with bus powers. Talk of taking back control of London's buses is just that. He's happy to persist with route tendering even as the pool of bidders has dwindled to a handful.

I'm quite sure by now, there are effectively no benefits to London route tendering, once you factor in the costs of managing the bureacracy required. And yet for some bizarre reason, it was the largest London operator that was the only new entrant to the Manchester scene when franchised. Why? Burnham had no other choice. Who else knows how to navigate a "London style" bidding process, other than those who are cleaning up out of being the middle man between London bus drivers and the London Mayor's bus managers? All under the watchful eye of a man whose father drove buses as a direct employee of the municipality of Londinium.

There is also clearly a lingering fondness within Labour for the principle of competition driving down costs. They still do not accept the argument that the only way an employee providing a public service will truly serve that public to the very best of themselves, is if they are quite literally being directed and rewarded by the duly elected representatives of that public.

All the other reasons don't really wash. They are excuses, easily overcome. The power of a single union holding all the cards in a bus strike, not so much.

it's not an accident I don't think, that the least known aspect of Mayor Burnham's bus network, now Prime Minister Burnham, is that his bus drivers are still employees of private multinational transport conglomerates. As they have been since the patchwork of privatised operators, many actually owned by their employees in part, were hoovered up into a handful of big groups.

The narrative around the Bee Network is carefully chosen to describe it as publicly controlled not publicly owned.

 

[johncrossley]

The reason seems pretty obvious to me.

A municipal operator is a monopoly. It hands far too much power to the unions.

Look at Khan, allegedly the most far left Labour politician out there with bus powers. Talk of taking back control of London's buses is just that. He's happy to persist with route tendering even as the pool of bidders has dwindled to a handful.

I'm quite sure by now, there are effectively no benefits to London route tendering, once you factor in the costs of managing the bureacracy required. And yet for some bizarre reason, it was the largest London operator that was the only new entrant to the Manchester scene when franchised. Why? Burnham had no other choice. Who else knows how to navigate a "London style" bidding process, other than those who are cleaning up out of being the middle man between London bus drivers and the London Mayor's bus managers? All under the watchful eye of a man whose father drove buses as a direct employee of the municipality of Londinium.

There is also clearly a lingering fondness within Labour for the principle of competition driving down costs. They still do not accept the argument that the only way an employee providing a public service will truly serve that public to the very best of themselves, is if they are quite literally being directed and rewarded by the duly elected representatives of that public.

All the other reasons don't really wash. They are excuses, easily overcome. The power of a single union holding all the cards in a bus strike, not so much.

it's not an accident I don't think, that the least known aspect of Mayor Burnham's bus network, now Prime Minister Burnham, is that his bus drivers are still employees of private multinational transport conglomerates. As they have been since the patchwork of privatised operators, many actually owned by their employees in part, were hoovered up into a handful of big groups.

Not many people who remember LT before tendering would go back to that. The service we had just before TfL took over was preferable even though subsidy was much lower (almost zero, although there is some dispute about that).

If you have a council owned and run bus company, it can't be sacked no matter how bad it is. With tendering there can be financial incentives or penalties to encourage better service.

 

[Bletchleyite]

The reason seems pretty obvious to me.

A municipal operator is a monopoly. It hands far too much power to the unions.

I don't think it's that in most cases, simply because small towns and cities are natural monopolies. If you were for instance going to "take back control" of Miton Keynes' city bus network, and crikey, I'd be in support of anything that got rid of the turquoise bandits (though at the risk of the even worse Aylesbury mob coming in), you would tender it to one company with a relatively high level of commercial freedom (Jersey's Libertybus probably being a good example of how a small to medium-town urban network might be tendered), and thus the unions' power would be exactly the same.

It's more similar to why the bins are tendered, and often groundskeeping too. It's simply because the skill base no longer exists at a municipal level, and recreating it is difficult - you have to recruit, train etc - and while you are doing so the commercial bus operator has deregistered their routes (as why would they stick around?) and run off into the distance before you've managed to get set up, a process which would take significantly longer than 56 days, particularly if the incumbent put barriers up like refusing to sell the depot etc as would be wholly within their rights to do.

In short, it's just a bit too hard to take it fully in house for the majority of Council areas and the likes.

London's use of tendering may well have more to do with unions and with keeping costs down by competitive tendering for each route, though. Similarly why they don't just take the Overground and Liz in house.

 

[Dwarfer1979]

I don't think it's that in most cases, simply because small towns and cities are natural monopolies. If you were for instance going to "take back control" of Miton Keynes' city bus network, and crikey, I'd be in support of anything that got rid of the turquoise bandits (though at the risk of the even worse Aylesbury mob coming in), you would tender it to one company with a relatively high level of commercial freedom (Jersey's Libertybus probably being a good example of how a small to medium-town urban network might be tendered), and thus the unions' power would be exactly the same.

I think the suggestion was, whether really true in practice, that private companies with interests in wider areas are better placed to face down unreasonable demands from Unions for pay & conditions as they are better able to battle industrial action by bringing staff in from outside the area (& a perception that there is a lower proportion of union membership in private companies vs council organisations). There has certainly been a case that the big groups have been able to ship drivers in from across the country when long term strikes occurred. It is also harder for politicians generally, although the issues in Birmingham with waste collection show this is not an absolute, to stand up to the major disruption caused by industrial action when it is their decisions causing it and in their power to fix it as they have to face the electorate every 4 years.

It's more similar to why the bins are tendered, and often groundskeeping too. It's simply because the skill base no longer exists at a municipal level, and recreating it is difficult - you have to recruit, train etc - and while you are doing so the commercial bus operator has deregistered their routes (as why would they stick around?) and run off into the distance before you've managed to get set up, a process which would take significantly longer than 56 days, particularly if the incumbent put barriers up like refusing to sell the depot etc as would be wholly within their rights to do.

If you were setting up a municipal to replace a commercial operator (as opposed to setting up a new operation to take on tendered work or introduce new services) you would need to buy the commercial operator as a going concern, I don't think the legislation allows you to set up a municipal by forcing an existing operator out of business without compensation. As such you would have to pay the asset price of the total fleet/depot (the valuation the operator holds for their assets on their books not what you would necessarily get on the open market) plus the value of goodwill for the business - even if you don't want all the fleet due to age or specification. If you franchise you don't have to pay the operator for the value of the business just the value of the assets you take over (so intangibles like goodwill are irrelevant) and as a deal for specific deal at an agreed price based on the actual value of the asset.

Franchising, as it appears to have been set up legislatively, does not need to compensate operators for the loss of their operation as it is considered they still have the opportunity to gain work through the tendering - unrealistic as that is for a number of operators - which reduces the amount of actual money that the council needs to pay out in a single bulk payment. The set-up costs of franchising may end up similar in the end due to investment in new resources but that cost is spread out in lots of smaller payments over a longer period of time which can be easier for councils to fund.

In short, it's just a bit too hard to take it fully in house for the majority of Council areas and the likes.

If you are taking over a business TUPE would apply to staff so expertise would transfer from operator to council in the process of setting up a municipal operator.

 

[NorthernSpirit]

It will certainly be interesting to see what happens when the likes of Blackpool Transport and Ipswich Buses get ‘taken over’ as such when their respective owner councils get subsumed into new unitary authorities.

I would have thought that in the event of Blackpool Transport being taken over, it'd be an employee buyout and ran in similar stance to that of the pre-Stagecoach days of Preston Bus.

In Scotland, local authorities have been able to run their own municipal operation since June 2022 but none have yet elected to do so. Highland Council though has acquired D&E Coaches who provide local bus and school contracts as well as being a subcontractor to Scottish Citylink on their Ullapool route. Dumfries and Galloway, Scottish Borders and Western Isles Councils all have numerous bus routes operating under section 22 permits. All have large buses or coaches in their fleets though SBC only run minibuses on their local bus routes.

How does this work when crossing the national boundary between Scotland and England, given that both countries have slighly different regulations?

== Doublepost prevention - post automatically merged: 23 Jul 2026 ==

Has any authority outside the UK reverted back to in house operation?

Malta is the only one I can think of.

 

[RT4038]

I would have thought that in the event of Blackpool Transport being taken over, it'd be an employee buyout and ran in similar stance to that of the pre-Stagecoach days of Preston Bus.


How does this work when crossing the national boundary between Scotland and England, given that both countries have slighly different regulations?

== Doublepost prevention - post automatically merged: 23 Jul 2026 ==

Blackpool Transport being 'taken over' will be by the new Unitary Authority that covers Blackpool - so just a paper transfer transaction, not a 'sale' of any sort. Blackpool Transport is an 'arms-length' company where all the shares are owned by Blackpool Council. Those shares will simply transfer to whatever the Unitary Authority covering Blackpool will be called.


When crossing the national boundary, it would work as any other Scottish registered bus company (or vice-versa) - the company would have to comply with the regulations and Operator Licensing appertaining to where it is registered, and any registered local bus services would have to comply with the local bus registration rules in the country it was operating. Who owns the company, and what rules this ownership has, has nothing to do with the local bus registration procedures and rules. Cumbria Corporation Transport could run to Dumfries as much as Dumfries & Galloway Corporation Transport could run to Carlisle, if they wanted to.

 

[em81]

Short answer TfL buses. Metro mayors want what Boris had as mayor of London. They don't want to try a different model, that might not work and then be seen as the mayor who introduced the failed model.

 

[johncrossley]

Metro mayors want what Boris had as mayor of London.

London bus tendering started in the mid 80s when there was no Mayor of London. This was after the abolition of the Greater London Council (GLC), so London Transport (which was the public facing name before TfL) was run directly from central Government at this time.

 

[HighlandStorm]

In Scotland, local authorities have been able to run their own municipal operation since June 2022 but none have yet elected to do so. Highland Council though has acquired D&E Coaches who provide local bus and school contracts as well as being a subcontractor to Scottish Citylink on their Ullapool route. Dumfries and Galloway, Scottish Borders and Western Isles Councils all have numerous bus routes operating under section 22 permits. All have large buses or coaches in their fleets though SBC only run minibuses on their local bus routes.

The Highland Council begun operating bus services in and around Inverness before the council acquired D&E coaches.

 

[Magrar]

What powers exist for train operators to run buses now? Given the trains are, or soon will be, publicly owned.

E.g., if Northern wanted to own and operate a network of buses specifically designed and run as commuter feeders from remote villages to the closest branch line station.

 

[duncombec]

What powers exist for train operators to run buses now? Given the trains are, or soon will be, publicly owned.

E.g., if Northern wanted to own and operate a network of buses specifically designed and run as commuter feeders from remote villages to the closest branch line station.

I do not believe there is anything to stop Northern applying for an operator licence just as anyone else, provided they fulfil the requirements on financial standing and transport management. I suspect it would be an arms length company, similar to, say, Reading Buses.

 

[adam rogan]

Lancashire County Council was thinking of experimenting with a multi operator Anybus scheme which would have revolutionized public transport enabling you to switch between operators. The new boundary changes seem a bit odd in that it seperates South Ribble which for all intents and purposes is culturally and historically Preston(apart from Leyland) from the city itself.

I can only imagine it leading to a fragmentation of transport policy unless the Lancashire Combined authority ends up playing a more active role in the new set up. The combining of Blackpool with Fylde and Wyre was a natural move and restoring Blackburn/Darwen into a Lancashire authority makes sense. Merging Lancaster with ribble valley would be wiser, and Preston with South Ribble, West Lancs and Chorley but I assume that the Northern authority under my proposal would be too rural.

 

[Man of Kent]

Lancashire County Council was thinking of experimenting with a multi operator Anybus scheme which would have revolutionized public transport enabling you to switch between operators. The new boundary changes seem a bit odd in that it seperates South Ribble which for all intents and purposes is culturally and historically Preston(apart from Leyland) from the city itself.

I can only imagine it leading to a fragmentation of transport policy unless the Lancashire Combined authority ends up playing a more active role in the new set up. The combining of Blackpool with Fylde and Wyre was a natural move and restoring Blackburn/Darwen into a Lancashire authority makes sense. Merging Lancaster with ribble valley would be wiser, and Preston with South Ribble, West Lancs and Chorley but I assume that the Northern authority under my proposal would be too rural.

Lancashire Combined County Authority is the Local Transport Authority for the entire area, having taken over the powers from the county, Blackpool and Blackburn with Darwen Councils in April 2025. However, much was then delegated back to the councils. If it follows the pattern at other new combined authorities (CA), council staff will transfer to the CA in due course.

 

[RT4038]

What powers exist for train operators to run buses now? Given the trains are, or soon will be, publicly owned.

E.g., if Northern wanted to own and operate a network of buses specifically designed and run as commuter feeders from remote villages to the closest branch line station.

I don't think there is anything to stop a train operator to apply for an Operators Licence and run buses (outside of a Franchised area of course), aside from the Control and Financial rules of their owners, who are highly unlikely to agree to such a thing, apart from possibly as a replacement to existing train services. Even then, I doubt they would countenance owning the vehicles and employing staff for the purpose, but rather would go for a contract with an established operator.

The reason for this are:
(a) Running these services/service is highly unlikely to be revenue positive - 'remote villages' are unlikely to produce more (new) revenue than the cost of running the buses. Central Government is looking to reduce the costs to them of the rail industry, not the other way around;
(b) Central Government does not want to be establishing the precedent of directly specifying, procuring and funding local bus services. Do this in one place and everywhere will be asking for it
(c) Central Government policy is going towards devolving local transport (even rail) to more local Government structures, for them to decide on the best way of serving communities. They would not want some rail orientated bus service to damage the viability of the other bus services also serving the non rail orientated demands.

 

[HighlandStorm]

The Highland Council begun operating bus services in and around Inverness before the council acquired D&E coaches.

Just to follow this up, a couple of non D&E council buses that are branded for advertising Inverness Castle past me today and they do state the operator as ‘The Highland Council’.

 

[Magrar]

I don't think there is anything to stop a train operator to apply for an Operators Licence and run buses (outside of a Franchised area of course), aside from the Control and Financial rules of their owners, who are highly unlikely to agree to such a thing, apart from possibly as a replacement to existing train services. Even then, I doubt they would countenance owning the vehicles and employing staff for the purpose, but rather would go for a contract with an established operator.

The reason for this are:
(a) Running these services/service is highly unlikely to be revenue positive - 'remote villages' are unlikely to produce more (new) revenue than the cost of running the buses. Central Government is looking to reduce the costs to them of the rail industry, not the other way around;
(b) Central Government does not want to be establishing the precedent of directly specifying, procuring and funding local bus services. Do this in one place and everywhere will be asking for it
(c) Central Government policy is going towards devolving local transport (even rail) to more local Government structures, for them to decide on the best way of serving communities. They would not want some rail orientated bus service to damage the viability of the other bus services also serving the non rail orientated demands.

Take a look at Blyth. Given all the relevant policy directions, devolution, reindustrialisation, public service, innovation to identify and replicate best practice, why would a combination of the local authorities and Northern not want to run a bus service connecting Bebside and Newsham with the bus station via the roads closest to the areas of industry along the coast and river bank? Literally serve the stations at sensible times, not stops up to a kilometre away for peak time only or hourly!?! buses. The current provision is laughable or non-existent.

Maybe it wouldn't make a profit, but if protected as a municipal service that nobody else wants to provide, it would surely boost passenger numbers on the line, and in the more desirable direction than it seems to be set up for - bringing people into Blyth to work, not the other way around (giving relatively richer car owning Blyth suburbanites a faster/cheaper way to get to their office job in Newcastle).

 

[RT4038]

Take a look at Blyth. Given all the relevant policy directions, devolution, reindustrialisation, public service, innovation to identify and replicate best practice, why would a combination of the local authorities and Northern not want to run a bus service connecting Bebside and Newsham with the bus station via the roads closest to the areas of industry along the coast and river bank? Literally serve the stations at sensible times, not stops up to a kilometre away for peak time only or hourly!?! buses. The current provision is laughable or non-existent.

Money. Which bus service, or other service that the Local Transport Authority (presumably Northumberland County) provides, would you reduce or cancel in order to provide this service?

Maybe it wouldn't make a profit, but if protected as a municipal service that nobody else wants to provide, it would surely boost passenger numbers on the line, and in the more desirable direction than it seems to be set up for - bringing people into Blyth to work, not the other way around (giving relatively richer car owning Blyth suburbanites a faster/cheaper way to get to their office job in Newcastle).

It most probably wouldn't make a profit for the subsidising Authority, which would be Northumberland. Northumberland wouldn't get any of the additional rail revenue (that would go to Central Govt.) and they wouldn't want to pay for the bus service because [if there is any worthwhile commuting numbers from Newcastle to Blyth] this would benefit Tyne & Wear taxpayers not Northumberland. T & W wouldn't want to pay for it, because it is out of their area. Such is the transport subsidising regime at present. Regional Transport Authorities, encompassing both road and rail, is the answer, but be careful what you wish for....

 

[Magrar]

Money. Which bus service, or other service that the Local Transport Authority (presumably Northumberland County) provides, would you reduce or cancel in order to provide this service?



It most probably wouldn't make a profit for the subsidising Authority, which would be Northumberland. Northumberland wouldn't get any of the additional rail revenue (that would go to Central Govt.) and they wouldn't want to pay for the bus service because [if there is any worthwhile commuting numbers from Newcastle to Blyth] this would benefit Tyne & Wear taxpayers not Northumberland. T & W wouldn't want to pay for it, because it is out of their area. Such is the transport subsidising regime at present. Regional Transport Authorities, encompassing both road and rail, is the answer, but be careful what you wish for....

It's being assumed by me that major changes in how the authorities work together are planned, not least because the present system isn't working. I saw quite a few tendered services transporting fresh air, for example. If that's because one authority would rather be doing that than helping people a few miles away across an arbitrary line on a map, that's an issue.

 

[RT4038]

It's being assumed by me that major changes in how the authorities work together are planned, not least because the present system isn't working. I saw quite a few tendered services transporting fresh air, for example. If that's because one authority would rather be doing that than helping people a few miles away across an arbitrary line on a map, that's an issue.

Of course, your proposed service may also only carry fresh air ! Were the tendered services you saw carrying fresh air running at the same time as your proposed service taking people to work? There would be more votes for Northumberland CC representatives in a service aimed at Northumberland residents, even if they carried fresh air at certain times, than T&W residents. Currently there is no Regional oversight and even if there was, there would likely be pressure to ensure that spending was fairly allocated. There is no guarantee that such a system would not have other adverse effects, but equally as much, the current system may well fail in other respects, as you point out.

 

[TheGrandWazoo]

Of course, your proposed service may also only carry fresh air ! Were the tendered services you saw carrying fresh air running at the same time as your proposed service taking people to work? There would be more votes for Northumberland CC representatives in a service aimed at Northumberland residents, even if they carried fresh air at certain times, than T&W residents. Currently there is no Regional oversight and even if there was, there would likely be pressure to ensure that spending was fairly allocated. There is no guarantee that such a system would not have other adverse effects, but equally as much, the current system may well fail in other respects, as you point out.

The other problem is that passengers currently enjoy a very comprehensive set of bus services from Blyth direct to Newcastle city centre. It takes an hour (unless you get the X30 which is 45 mins).

The alternative is to get a bus from Blyth to Bebside and to provide an interchange with a big enough window to allow passengers to go from one mode to another (25 mins?) and then onto a train that takes 30 mins and deposits you at the ironically named Central Station.

Also, you would undermine the Cramlington service.

 

[em81]

London bus tendering started in the mid 80s when there was no Mayor of London. This was after the abolition of the Greater London Council (GLC), so London Transport (which was the public facing name before TfL) was run directly from central Government at this time.

I was aware it started before Boris. However, Boris drew attention to how much control he had when he pledged to remove the bendy buses and to introduce a next generation Routemaster bus. The previous idea of replacing old buses with bendy buses hadn't attracted the same level of attention nationally.

 

[The exile]

I don't think it's that in most cases, simply because small towns and cities are natural monopolies. If you were for instance going to "take back control" of Miton Keynes' city bus network, and crikey, I'd be in support of anything that got rid of the turquoise bandits (though at the risk of the even worse Aylesbury mob coming in), you would tender it to one company with a relatively high level of commercial freedom (Jersey's Libertybus probably being a good example of how a small to medium-town urban network might be tendered), and thus the unions' power would be exactly the same.

It's more similar to why the bins are tendered, and often groundskeeping too. It's simply because the skill base no longer exists at a municipal level, and recreating it is difficult - you have to recruit, train etc - and while you are doing so the commercial bus operator has deregistered their routes (as why would they stick around?) and run off into the distance before you've managed to get set up, a process which would take significantly longer than 56 days, particularly if the incumbent put barriers up like refusing to sell the depot etc as would be wholly within their rights to do.

In short, it's just a bit too hard to take it fully in house for the majority of Council areas and the likes.

London's use of tendering may well have more to do with unions and with keeping costs down by competitive tendering for each route, though. Similarly why they don't just take the Overground and Liz in house.

As well as that, I doubt there are many Local Authorities whose finances would cope with suddenly taking on the amount of extra debt taking over from an existing operator would entail.