West Yorkshire bus franchising

[tomoufc]

I'm not sure that's an entirely fair summary ... while they have been critical of the idea of franchising all along, the legal challenge is based on the bar being set too high for SMEs to be able to compete (which has a kernel of truth but is arguable, when Stotts did successfully compete). I'm not sure whether the insinuation that the winners were "predetermined" is part of their challenge, but for their sake I hope not, as I don't think there's any way that would stand up in court, and undermines the validity of the rest of their argument as it just looks like sour grapes.

Yes - it’s an incoherent statement, mixing accusations of intended and unintended consequences

 

[John HG1]

It seems to me that the only way to achieve anything like a level playing field is to franchise on a route by route basis, as in London. Having said that, there are few if any SMEs in the capital. Is that because they don't want such work, don't exist or still get squeezed out by the big boys?
Route by route leaves sourcing of depots etc to the operator and arguably creates more management issues for the franchising body. Each method has advantages and disadvantages.

 

[TheGrandWazoo]

It seems to me that the only way to achieve anything like a level playing field is to franchise on a route by route basis, as in London. Having said that, there are few if any SMEs in the capital. Is that because they don't want such work, don't exist or still get squeezed out by the big boys?
Route by route leaves sourcing of depots etc to the operator and arguably creates more management issues for the franchising body. Each method has advantages and disadvantages.

We've discussed this at length in the past. The tendering body can:

• Create an overall compliance framework so that you get all the standard stuff pulled together in one fell swoop
  • In fairness to WYCA, they have done this
• You create packages that are of a small enough size that they are attractive to SMEs
  • Again, this seems like they have done this
• The issue seems to be around key areas
  • Financial standing - are operators expected to provide surety that is a multiple of the contract value? If so, that becomes a hurdle
  • The extent and scale of the technical response - yes, you need to establish criteria that enables the selection of a supplier but does it need to involve (as a potential example) providing four pages of text on how you deliver social value in employing local people, or five pages on your sustainable sourcing approach
    • The large firms will have a boatload of collateral on how they do this around the world; an SME won't

This is NOT to reduce the bar in terms of the delivery of the tender. SMEs should be delivering the service as intended to the same standards as anyone else.

 

[tomoufc]

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== Doublepost prevention - post automatically merged: Tuesday at 13:04 ==

It seems to me that the only way to achieve anything like a level playing field is to franchise on a route by route basis, as in London. Having said that, there are few if any SMEs in the capital. Is that because they don't want such work, don't exist or still get squeezed out by the big boys?
Route by route leaves sourcing of depots etc to the operator and arguably creates more management issues for the franchising body. Each method has advantages and disadvantages.

Forgive my ignorance, but why have the city regions gone for area-based franchising? I assume that it is deemed less risky, in the context of shifting from a deregulated network (which hasn’t been the historic trajectory in London).

 

[mangad]

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== Doublepost prevention - post automatically merged: Tuesday at 13:04 ==


Forgive my ignorance, but why have the city regions gone for area-based franchising? I assume that it is deemed less risky, in the context of shifting from a deregulated network (which hasn’t been the historic trajectory in London).

Most likely because taking over the depots and going for area-based packages removes the huge advantage incumbent operators had. A large incumbent operator would already have fully staffed, fully equipped depots in prime locations. In Greater Manchester Stagecoach was the dominant operator in the south, operating the vast majority of services. If they'd been allowed to keep all their depots and vehicles they would have been at an incredible advantage financially over anyone else.

Small franchises are, however, basically a small number of routes.

 

[TheGrandWazoo]

Most likely because taking over the depots and going for area-based packages removes the huge advantage incumbent operators had. A large incumbent operator would already have fully staffed, fully equipped depots in prime locations. In Greater Manchester Stagecoach was the dominant operator in the south, operating the vast majority of services. If they'd been allowed to keep all their depots and vehicles they would have been at an incredible advantage financially over anyone else.

Small franchises are, however, basically a small number of routes.

Exactly.

By going for areas and based on (in the main) authority supplied depots, it removes the power of the incumbency and so levels the playing field in that respect. Arguably also strips out a profit line though I'm less convinced that there's a saving "in the round".

There are other benefits like economies of scale in terms of procurement workload too.

 

[Deerfold]

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== Doublepost prevention - post automatically merged: Tuesday at 13:04 ==


Forgive my ignorance, but why have the city regions gone for area-based franchising? I assume that it is deemed less risky, in the context of shifting from a deregulated network (which hasn’t been the historic trajectory in London).

Generally, outside London each route needs a very small number of buses so the amount of bureaucracy per bus would be massive.

Even London's smallest routes are often packaged together with another route or two when tendered.

 

[tomoufc]

Thanks Deerfold and mangad

 

[mattb7tl]

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== Doublepost prevention - post automatically merged: Tuesday at 13:04 ==


Forgive my ignorance, but why have the city regions gone for area-based franchising? I assume that it is deemed less risky, in the context of shifting from a deregulated network (which hasn’t been the historic trajectory in London).

You also have more competition doing depot tendering rather than individual routes. It is extremely unrealistic to expect an operator to spend millions to build a depot to start bidding for individual services or packages.

All relatively major operators can move in assuming they can prove competency and be competitive with pricing with little hurdles as they are not required to source anything.

 

[Resuwen]

Buses are meant to be a public service, not a commercial business for two-bit companies.

Thankfully we are moving back into that now.

I blame the architects of deregulation for the collateral damage we are seeing.

 

[158756]

Generally, outside London each route needs a very small number of buses so the amount of bureaucracy per bus would be massive.

Even London's smallest routes are often packaged together with another route or two when tendered.

Though this raises the question of why councils in deregulated areas don't often take this approach. West Yorkshire for example could have put all their tenders in one big package the likes of Squarepeg wouldn't have been able to compete for.

What is special about franchising that needs the resources of a multinational corporation to bid for a contract to run a few minibuses?

 

[Deerfold]

Though this raises the question of why councils in deregulated areas don't often take this approach. West Yorkshire for example could have put all their tenders in one big package the likes of Squarepeg wouldn't have been able to compete for

I'm not sure which approach you mean. Having very large packages or individual routes?

Having all the tenders in one big package would tend to mean they'd get worse prices as no one operator has depots handy for them all. This would lead to more dead running.

It'd also mean there'd be a chance of a massive increase in the price in one go.

What is special about franchising that needs the resources of a multinational corporation to bid for a contract to run a few minibuses?

Presumably it doesn't, if Stotts can win one.

In Keighley, pre-franchising, Transdev have edged out the smaller companies that used to run some routes, except for the tiny 903 and some school buses.

 

[Man of Kent]

Buses are meant to be a public service, not a commercial business for two-bit companies.

Thankfully we are moving back into that now.

I blame the architects of deregulation for the collateral damage we are seeing.

In most of the country, deregulation slowed down the rate of decline in passenger numbers. It also cut the cost to the public purse. I cannot find figures for West Yorkshire, although a PTE issued booklet states that passenger numbers increased from 1982 to 1984 "reversing two decades of decline".
But neither deregulated nor franchised services can do anything about the decline of town centres, the principal destination for the largest cohort of passengers.

 

[Deerfold]

In most of the country, deregulation slowed down the rate of decline in passenger numbers. It also cut the cost to the public purse.

In areas which had routes that ran at a profit, it didn't.

In West Yorkshire the profits from Metrobus's profitable routes were used to subsidise other routes.

After deregulation, profits were kept by private companies, but they still wanted paying to run unprofitable ones.

 

[SCH117X]

In most of the country, deregulation slowed down the rate of decline in passenger numbers. It also cut the cost to the public purse.

Not between Harrogate and Wetherby where competition resulted in the public purse having to fund the former route.

 

[TheGrandWazoo]

In areas which had routes that ran at a profit, it didn't.

In West Yorkshire the profits from Metrobus's profitable routes were used to subsidise other routes.

After deregulation, profits were kept by private companies, but they still wanted paying to run unprofitable ones.

That was how the entire bus industry worked before deregulation. I don't know where @Man of Kent got his info from (and I can't find the original source for this) but it shows what is generally accorded to be the truth



The PTE areas fell throughout the 1970s, as did everywhere else. The levelling off/slight increase in the early 80s was only possible with large subsidies on top of the cross subsidy. To put in context, addition subsidy equated to £23 per person in West Yorkshire ( https://api.parliament.uk/historic-hansard/commons/1986/mar/17/transport-act-1985-1) so the idea that the network survived on cross subsidy isn't true.

Not between Harrogate and Wetherby where competition resulted in the public purse having to fund the former route.

Yes but in general, a lower cost base led to a reduction in subsidy by about half.

 

[Mollman]

Haven't we done the deregulation argument to death already on this and other threads?!

 

[TheGrandWazoo]

Haven't we done the deregulation argument to death already on this and other threads?!

You are absolutely right - we have Let's move on for everyone's sanity

 

[Tetchytyke]

What is special about franchising that needs the resources of a multinational corporation to bid for a contract to run a few minibuses?

It doesn’t need the resources of a multinational corporation. But if those multinational corporations decide that they would like to bid for those franchises then they are at an immediate and significant advantage over smaller local companies. They have the skills to write in procurement-speak and they have the money to hire in expertise they don’t already have within their group.

Squarepeg’s public pronouncements do tend to suggest that they don’t necessarily have the smooth communication skills that are needed in this sort of competition. That doesn’t mean they’re not good, competent bus people. But if you can’t communicate why you’re a good competent bus person then you’re at a disadvantage.

It isn’t fair but I’m not sure how to fix it. It’s about human interaction at the root of it and the procurement and legal people can try and be as impartial as possible but it’s human nature to score well-written and clear communication more favourably.

It’s the same in a lot of procurement, both public and private sector. Take clearing contracts or school catering contracts, they’re pretty much always won by large multinationals. Sometimes this is obvious and sometimes they hide behind a pretend local brand.

The only difference is that buses are obvious and people notice. Nobody notices or even really cares if a local cleaning company is squeezed off a schools contract by someone like phs or Rentokil.

 

[quantinghome]

In most of the country, deregulation slowed down the rate of decline in passenger numbers. It also cut the cost to the public purse. I cannot find figures for West Yorkshire, although a PTE issued booklet states that passenger numbers increased from 1982 to 1984 "reversing two decades of decline".
But neither deregulated nor franchised services can do anything about the decline of town centres, the principal destination for the largest cohort of passengers.

The place to go to for detailed information on this period in West Yorkshire is the incredible "Leeds Transport" series. Volume 5 covers 1974 to 1986 - from the formation of WYPTE (and consequently Leeds buses being removed from Leeds City Council's control) to deregulation. It's a real labour of love from the author - the word comprehensive doesn't do it justice.

The basic story over this period (at least for Leeds) is that after the buses reigning supreme in the 1960s following the closure of the tram network and local station closures under the Beeching cuts, the 1970s was a pretty hard time with the continued rise of the car, high inflation and disruption caused by the new West Yorkshire council taking over Leeds' bus services. However by the early 1980s, once the PTE had overcome its teething troubles, the situation improved and modest growth returned with discount fares like the saverstrip. Then deregulation happened and the service nosedived.

 

[tomoufc]

It doesn’t need the resources of a multinational corporation. But if those multinational corporations decide that they would like to bid for those franchises then they are at an immediate and significant advantage over smaller local companies. They have the skills to write in procurement-speak and they have the money to hire in expertise they don’t already have within their group.

Squarepeg’s public pronouncements do tend to suggest that they don’t necessarily have the smooth communication skills that are needed in this sort of competition. That doesn’t mean they’re not good, competent bus people. But if you can’t communicate why you’re a good competent bus person then you’re at a disadvantage.

It isn’t fair but I’m not sure how to fix it. It’s about human interaction at the root of it and the procurement and legal people can try and be as impartial as possible but it’s human nature to score well-written and clear communication more favourably.

It’s the same in a lot of procurement, both public and private sector. Take clearing contracts or school catering contracts, they’re pretty much always won by large multinationals. Sometimes this is obvious and sometimes they hide behind a pretend local brand.

The only difference is that buses are obvious and people notice. Nobody notices or even really cares if a local cleaning company is squeezed off a schools contract by someone like phs or Rentokil.

Not sure if I buy this - they make a very specific point about turnover. I’ll grant you it’s not clear what they mean, but their statement does specifically focus on that.

== Doublepost prevention - post automatically merged: Wednesday at 09:15 ==

On franchising, I’m really looking forward to Jonathan Bray’s book on the subject. Who in Greater Manchester would want to return to the status quo ante?

 

[TheGrandWazoo]

It doesn’t need the resources of a multinational corporation. But if those multinational corporations decide that they would like to bid for those franchises then they are at an immediate and significant advantage over smaller local companies. They have the skills to write in procurement-speak and they have the money to hire in expertise they don’t already have within their group.

Squarepeg’s public pronouncements do tend to suggest that they don’t necessarily have the smooth communication skills that are needed in this sort of competition. That doesn’t mean they’re not good, competent bus people. But if you can’t communicate why you’re a good competent bus person then you’re at a disadvantage.

It isn’t fair but I’m not sure how to fix it. It’s about human interaction at the root of it and the procurement and legal people can try and be as impartial as possible but it’s human nature to score well-written and clear communication more favourably.

It’s the same in a lot of procurement, both public and private sector. Take clearing contracts or school catering contracts, they’re pretty much always won by large multinationals. Sometimes this is obvious and sometimes they hide behind a pretend local brand.

The only difference is that buses are obvious and people notice. Nobody notices or even really cares if a local cleaning company is squeezed off a schools contract by someone like phs or Rentokil.

It is also an overtly stated government aim to have more SMEs in the public sector https://www.gov.uk/government/news/...y-as-government-sets-new-targets-for-spending

One way in which you can do it is to reduce the amount of "blurb" that is asked for. 1000 words on how you'll deliver social value by employing local people (and is evidenced by existing examples) is meat and drink to a multinational who can dip into their reservoir of collateral, is almost impossible for an SME, and has no real impact on the delivery of the service.

You have to have some level of procurement and technical responses but you can make things less onerous.

 

[Tetchytyke]

1000 words on how you'll deliver social value by employing local people (and is evidenced by existing examples) is meat and drink to a multinational who can dip into their reservoir of collateral, is almost impossible for an SME, and has no real impact on the delivery of the service.

The real problem is that this sort of stuff isn’t relevant to running a bus service but it ends up being the differentiator between bids anyway. I get why, the basic bid of “we will run x buses for y money” is going to be largely the same from one bidder to another, so it ends up that the fluff is the differentiator.

It’s not right and it’s not fair but I have no real idea how to sort it.

 

[Deerfold]

The real problem is that this sort of stuff isn’t relevant to running a bus service but it ends up being the differentiator between bids anyway. I get why, the basic bid of “we will run x buses for y money” is going to be largely the same from one bidder to another, so it ends up that the fluff is the differentiator.

It’s not right and it’s not fair but I have no real idea how to sort it.

Is it not more that there's a sieve based on the information and of those that pass it comes down to the £/mile?

 

[Megafuss]

It is also an overtly stated government aim to have more SMEs in the public sector https://www.gov.uk/government/news/...y-as-government-sets-new-targets-for-spending

One way in which you can do it is to reduce the amount of "blurb" that is asked for. 1000 words on how you'll deliver social value by employing local people (and is evidenced by existing examples) is meat and drink to a multinational who can dip into their reservoir of collateral, is almost impossible for an SME, and has no real impact on the delivery of the service.

You have to have some level of procurement and technical responses but you can make things less onerous.

Some providers, including SME operators are clearly using AI for PSQs, responses of which that bear no resemblance to the reality on the ground.

Ticks a box though.

 

[TheGrandWazoo]

The real problem is that this sort of stuff isn’t relevant to running a bus service but it ends up being the differentiator between bids anyway. I get why, the basic bid of “we will run x buses for y money” is going to be largely the same from one bidder to another, so it ends up that the fluff is the differentiator.

It’s not right and it’s not fair but I have no real idea how to sort it.

It depends how the scoring mechanism is set up as to what the differentiator is i.e. what proportion price is vs. the quality/social value* element. Even the pricing score can be done either as a score (lowest price = 100, next lowest price = 90 that is multiplied by the weighting of the score so if it 40%, you score 40, 36 and so on) OR as a relative measure between lowest price and next lowest etc. There's lots of ways in which the scoring can be tweaked to make it more or less cost weighted.

* For anyone reading this and is unfamiliar, quality/SV score does not relate to previous operational performance (not permissable) nor to the quality of the services to be provided.

 

[noddingdonkey]

Some very interesting mixed messaging coming out of WYCA at the moment - on the one hand, "the current service is unacceptably poor so we need to take it into public ownership", on the other Metro pushing Catch the Bus Month with social media posts suggesting that most of the common criticisms are myths and presenting an alleged reality check.

 

[GoneSouth]

Marketing budget to spend so have to do something with it.

You can’t really say in a campaign that the service is useless until April when it will magically become wonderful