National express West Midlands

[Gareth1990]

I just don’t see why you would re-privatise a network you just bought, it just doesn’t make any sense to me

 

[TheGrandWazoo]

I just don’t see why you would re-privatise a network you just bought, it just doesn’t make any sense to me

Because as has been explained earlier, it gives you a fire break between any industrial relations issues and the contracting authority. If there's any IR issues, it's an issue for the contractor not WMCA, and if there's performance issues, you can beat up the contractor.

Remove that and then Richard Parker has to deal directly with Unite, and is on the hook for any performance issues.

 

[positron]

At the end of the day though IR issues are an issue for the mayor because they presumably need their busses to run. The argument that having an entity in between suddenly makes things much better is silly. I don't doubt that's how some people think but it's stupid nonetheless.

 

[johncrossley]

At the end of the day though IR issues are an issue for the mayor because they presumably need their busses to run. The argument that having an entity in between suddenly makes things much better is silly. I don't doubt that's how some people think but it's stupid nonetheless.

Private companies can be financially incentivised to perform well or penalised for bad performance and ultimately can be removed for continual poor performance. Whereas if you have a poor performing state run company then there's not much you can do. Apart from, perhaps, threaten to privatise if things don't improve.

 

[TheGrandWazoo]

At the end of the day though IR issues are an issue for the mayor because they presumably need their busses to run. The argument that having an entity in between suddenly makes things much better is silly. I don't doubt that's how some people think but it's stupid nonetheless.

No - it’s politics. It allows a politician to have someone to blame and kick.

 

[U-Bahnfreund]

I'm not up-to-date with current English legislation, how would bus operation work with a municipal bus company? Would there still be an in-house contract of the authority with its bus company instead of tendering?

 

[BuhSnarf]

At the end of the day though IR issues are an issue for the mayor because they presumably need their busses to run. The argument that having an entity in between suddenly makes things much better is silly. I don't doubt that's how some people think but it's stupid nonetheless.

It's never been about making things better, it's about it being a better solution for those in charge.

 

[Man of Kent]

I mean don't get me wrong franchising is absolutely going to be better than the current situation of a private companies doing what they want. But for me it's a stepping stone where the eventual state should just be public sector organisation(s) operating the services.

Hence why I keep saying it feels weird to go from close to the end state back to step 2. Obviously others will disagree with what an ideal end state is.


Well all the cruft of tendering contracts to private companies to run, instead of just running them yourself. Given it'll largely be the same staff actually running the services.

I'd suggest that reading TheGrandWazoo's responses is instructive.

WMCA is about to find out that running buses can be a very expensive activity. (To reiterate, operations in Greater Manchester cost around 2.25 times than the previous system, plus some very extensive capital spending).

 

[Simon75]

Agree, travelling in Birmingham was up there alongside London and Manchester as reasonably priced, multi-modal, frequent and decent quality and upkeep of fleet.

Nottingham have proven that you can run a municipal bus service, but that's likely because they never lost the ability/people talent and so they've changed incrementally as the landscape has and had the continued experience to train up new people. I think to suddenly enter the bus space now after not doing it for 30+ years will be difficult.

Nottingham City Transport is 18 % owned by Transdev. Has that made any influence on the company, or was it basically a silent partner?

 

[Wyrleybart]

Can anyone please hint at how things might work for non NXWM bus companies in the region like Diamond. Quite few years ago the 31 and 32 circulars between Walsall and Bloxwich were set up as West Midlands Bus with red liveried 12 and 62 plate Wright Eclipses. The NXWM fleet still tensd to work the services but the Diamond vehicles are more varied with newer Streetlites appearing. I am guessing this arrangement will cease in due course.

 

[birchesgreen]

I woinder what will happen to the NXWM m-ticket app.

 

[Megafuss]

I know with franchising on the horizon, there would be a worry about services. But didn't WMCA specifically earmark additional funding for this issue a year ago?.

I'm not sensing a network near "collapse" as one politician described it. Unless something has happened we are not party to.

 

[Bletchleyite]

I know with franchising on the horizon, there would be a worry about services.

There was a concern that NXWM would close their operation down as unprofitable and never likely to be profitable, leaving the West Midlands without a bus service for a significant period while the franchising was rushed along. Or that they'd sell it to an asset stripper who may not be cooperative with the process. It's in Mobico's interest if they're going to bid for franchises to set up a new legal entity for that without any of the previous baggage (other than that they can't avoid because of TUPE).

However they were going to need the depots and vehicles anyway - TfGM purchased those from the operators, didn't they? - so just buying the whole thing may have not been substantially more expensive and has secured services in the interim.

 

[Deerfold]

I'm not up-to-date with current English legislation, how would bus operation work with a municipal bus company? Would there still be an in-house contract of the authority with its bus company instead of tendering?

I think it'd have to be like Nottingham or Edinburgh.

The council owns a company that runs a lot of routes. Anything the council wanted to run would have to go out to tender.

Under current legislation I don't think they could stop other operators running without franchising.

 

[TheGrandWazoo]

I know with franchising on the horizon, there would be a worry about services. But didn't WMCA specifically earmark additional funding for this issue a year ago?.

I'm not sensing a network near "collapse" as one politician described it. Unless something has happened we are not party to.

There was a concern that NXWM would close their operation down as unprofitable and never likely to be profitable, leaving the West Midlands without a bus service for a significant period while the franchising was rushed along. Or that they'd sell it to an asset stripper who may not be cooperative with the process. It's in Mobico's interest if they're going to bid for franchises to set up a new legal entity for that without any of the previous baggage (other than that they can't avoid because of TUPE).

However they were going to need the depots and vehicles anyway - TfGM purchased those from the operators, didn't they? - so just buying the whole thing may have not been substantially more expensive and has secured services in the interim.

Excuse a little bit of my cynicism but I do wonder how much of a likelihood there was in Mobico upping sticks? Granted, the last accounts showed a loss maker but there were £7m of exceptionals there so it is profitable in an operating sense and you really would expect it to be so.

Mobico were already selling off properties to West Midlands CA. It probably made good sense to them to sell off the rest of the business as they were going to lose the properties in any case and it means they have derisked their business. So you could imagine a discussion around... "well, if you're buying the properties, and possibly some of the fleet assets, why don't you buy it all from us"... and that makes for a nice clean break from some of the liabilities.

For WMCA, it just accelerates the process anyway of buying the depots and they would have had to undertake some form of fleet purchase too.

Makes sense for both parties.

 

[positron]

I think it'd have to be like Nottingham or Edinburgh.

The council owns a company that runs a lot of routes. Anything the council wanted to run would have to go out to tender.

Under current legislation I don't think they could stop other operators running without franchising.

I *think* the provision TfL is looking to use isn't unique to London and isn't part of their separate regulatory framework for busses. I think there's a way under procurement law to direct award to your own in-house entity, so they could franchise and then just direct award the franchises. Now I'm not a lawyer and I'm just going off what I've found online so it's possible the recent 2025 bus services bill does somehow restrict this.

It makes a lot of sense from Mobicos perspective they were selling the assets to WMCA anyway (I think depots and busses were already expected to happen). They'd presumably have had to lease them back somehow, given the business wasn't making massive profits it's probably easier to just hand it all over and wait for franchising.

 

[Bletchleyite]

Excuse a little bit of my cynicism but I do wonder how much of a likelihood there was in Mobico upping sticks? Granted, the last accounts showed a loss maker but there were £7m of exceptionals there so it is profitable in an operating sense and you really would expect it to be so.

I don't know, but Mobico were looking at selling the operation, so it wasn't a zero risk thing. I guess the situation was indeed as you say that it was mutually advantageous and removed business risks for both Mobico and the Combined Authority. And in no way prevents Mobico from setting up a new legal entity to bid for franchises.

 

[TheGrandWazoo]

I don't know, but Mobico were looking at selling the operation, so it wasn't a zero risk thing. I guess the situation was indeed as you say that it was mutually advantageous and removed business risks for both Mobico and the Combined Authority. And in no way prevents Mobico from setting up a new legal entity to bid for franchises.

Selling the operation is one thing. The way it was announced was that the mayor "has acted to protect passengers and keep buses running" which sounds like some sort of business failure was imminent. I don't think it really was.

Of course, Mobico were looking to offload though the value of it was degraded by the prospect of franchising so would've wanted a deal (and who else might buy it?). WMCA probably took a pragmatic view to buy it now (and avoid the risk of some carpet bagger coming along who might have played hardball on properties etc) and have a much easier transition.

It just looks like a win/win for both parties.

 

[Bletchleyite]

It just looks like a win/win for both parties.

Agree.

The one risk that might remain now is that they have in effect just created a municipal operator, and thus there may be union pressure to leave it that way.

 

[Megafuss]

Excuse a little bit of my cynicism but I do wonder how much of a likelihood there was in Mobico upping sticks? Granted, the last accounts showed a loss maker but there were £7m of exceptionals there so it is profitable in an operating sense and you really would expect it to be so.

Mobico were already selling off properties to West Midlands CA. It probably made good sense to them to sell off the rest of the business as they were going to lose the properties in any case and it means they have derisked their business. So you could imagine a discussion around... "well, if you're buying the properties, and possibly some of the fleet assets, why don't you buy it all from us"... and that makes for a nice clean break from some of the liabilities.

For WMCA, it just accelerates the process anyway of buying the depots and they would have had to undertake some form of fleet purchase too.

Makes sense for both parties.

Not sure what the situation is now, but up until at least a couple of years ago, the commercial function for NXWM was actually based inside WMCA towers (in a separate silo)

So, I can very much imagine those sort of conversations taking place, given the recent relationship

 

[tomoufc]

Agree.

The one risk that might remain now is that they have in effect just created a municipal operator, and thus there may be union pressure to leave it that way.

Franchising is completely unnecessary IMO, especially when you have effectively already created a municipal operator. For those wondering whether municipal operation is impossible thanks to municipalities’ lack of ability to deal with unions, or because it creates inefficiencies that can only be addressed through competition (albeit in the limited sense of competition for rather than in the market), I’d point you to Nottingham, Blackpool and Edinburgh.

The only problem is the sunk costs of the franchising process itself. WYCA would be better to swallow them, IMO, because franchising won’t generate additional social or economic returns.

 

[Megafuss]

Franchising is completely unnecessary IMO, especially when you have effectively already created a municipal operator. For those wondering whether municipal operation is impossible thanks to municipalities’ lack of ability to deal with unions, or because it creates inefficiencies that can only be addressed through competition (albeit in the limited sense of competition for rather than in the market), I’d point you to Nottingham, Blackpool and Edinburgh.

The only problem is the sunk costs of the franchising process itself. WYCA would be better to swallow them, IMO, because franchising won’t generate additional social or economic returns.

Diamond still exist in the West Midlands, who i imagine will be watching proceedings very closely.

I also suspect the reason why Nottingham and Edinburgh is NOT looking at franchising is becuase there is a risk NCT and Lothian would lose out!

 

[TheGrandWazoo]

Agree.

The one risk that might remain now is that they have in effect just created a municipal operator, and thus there may be union pressure to leave it that way.

Which is why I think the statements are very much front and centre, stating that this is not a replacement to franchising but a step towards it. They have put those lines in there for a reason...

Franchising is completely unnecessary IMO, especially when you have effectively already created a municipal operator. For those wondering whether municipal operation is impossible thanks to municipalities’ lack of ability to deal with unions, or because it creates inefficiencies that can only be addressed through competition (albeit in the limited sense of competition for rather than in the market), I’d point you to Nottingham, Blackpool and Edinburgh.

If you want an example of the issues that they may wish to avoid... can I point you to the Birmingham bin strike which has been going since Jan 2025? With that very much in Richard Parker's consciousness, that may be exactly the reason he doesn't want a municipal bus operation!

 

[Resuwen]

Presumably NX logos will start being removed from the fleet fairly quickly?

 

[tomoufc]

Which is why I think the statements are very much front and centre, stating that this is not a replacement to franchising but a step towards it. They have put those lines in there for a reason...


If you want an example of the issues that they may wish to avoid... can I point you to the Birmingham bin strike which has been going since Jan 2025? With that very much in Richard Parker's consciousness, that may be exactly the reason he doesn't want a municipal bus operation!

Or the five year long guards’ strike on Britain’s franchised railways? Franchising doesn’t necessarily improve industrial relations or politicians’ involvement in them. To the extent that it does (if that can be proven) you then have to question whether it is worth all the cash leakages and transaction costs it produces.

 

[TheGrandWazoo]

Or the five year long guards’ strike on Britain’s franchised railways? Franchising doesn’t necessarily improve industrial relations or politicians’ involvement in them. To the extent that it does (if that can be proven) you then have to question whether it is worth all the cash leakages and transaction costs it produces.

I don't know what your point is.

I didn't say that franchising = more or less industrial disputes. What I said is that if they franchise and there is a dispute, then that is the contractors' responsibility and they will be on the hook.

If Richard Parker decided to take it as a directly operated activity, then in any dispute, he is on the hook commercially and politically. He may well have taken the view that it is better not to have that risk.

 

[tomoufc]

I don't know what your point is.

I didn't say that franchising = more or less industrial disputes. What I said is that if they franchise and there is a dispute, then that is the contractors' responsibility and they will be on the hook.

If Richard Parker decided to take it as a directly operated activity, then in any dispute, he is on the hook commercially and politically. He may well have taken the view that it is better not to have that risk.

My point is that this is wishful thinking, and potentially a very costly form of wishful thinking.

 

[YorkRailFan]

Diamond still exist in the West Midlands, who i imagine will be watching proceedings very closely.

As do Stagecoach in Coventry. Both will be following events closely over the next few weeks and months.

 

[TheGrandWazoo]

My point is that this is wishful thinking, and potentially a very costly form of wishful thinking.

In what way is it a potentially costly form of wishful thinking?

 

[tomoufc]

In what way is it a potentially costly form of wishful thinking?

I already explained