They've suddenly acquired a limitless budget like Transport for London? Where are they getting the funding from for this utopian situation? Do people still, after surely decades of experience to the contrary, trust Authorities to know what's best for the Public Interest?
I think there's two issues here.
1. Does public transport exist only to serve itself? Or are there wider economic and social benefits from it?
For-profit-only, unregulated private bus services will exist only to serve the former. Local Authority involvement is one, established, and accountable way of providing for the latter. And we do have a way of telling these authorities what is best for our interest - tried writing/talking to/voting for/voting against your local councillor?
But it is also true that economics play a part here - if a line is making a profit, then it is obviously doing what passengers want, the question comes when a line is not making a profit, does it still do what passengers or companies need? The answer to the latter is not always so clear-cut.
I would like to point out that we are the only western country to have deregulated our bus services the way we have. Not even the USA has been brave enough to attempt it. That may speak louder than any social argument.
2. If a Quality Contract Scheme is set up in Tyne & Wear, I would expect there to be some losers. Realistically, there is duplication and over-bussing in some areas. The Metrocentre - Newcastle corridor springs to mind, as does the Coast Road corridor. These services will have to be rationalised. In addition, there are some areas where local competition is keeping fares low (Sunderland for example), and this would go.
But there would also be winners. Some of the less profitable routes may see greater stability, and you would likely find it substantially easier to interchange to/from Metro.
Blatant land-grabs, like the X90 Tynemouth commuter express would be gone. That would put Metro on a surer footing, knowing that the rest of the bus network isn't out to deliberately undermine Metro, if it is profitable so to do. The real costs of operating bus services are not passed on to the bus companies in the same way Metro's costs are to Nexus, as infrastructure costs are not borne by the bus companies in the same way, and this is distorting the market at present.
Also, it should be noted that Metro fares are currently in line with, if not slightly cheaper than, the equivalent bus fares, so even if there was one unified fare structure, I wouldn't imagine a great hike in fares.
So there is scope for savings, without substantial fare increases. The true question is, is the cost of maintaining the status quo in excess of the cost of running a franchised network with the operators continuing to cream a few % off the top, while there is an increase in cross-subsidisation of routes? (Noting that some operators may be cheaper than the incumbents). Franchising like this may level the playing field a little, and I think that's what Go Ahead are worried about more than anything else.
Going back to the "branding" point, the municipals use branded routes, just like any other. I refer you to lines like Cardiff BayCar, Cardiff Green, Cardiff Red, Edinburgh AirLink, Reading JetBlack, Reading Vitality... NCTX have grouped all of their routes into colours...
Branding is useful for the passenger, possibly at the expense of a good corporate livery.