Use of the coming direct award power by bus franchising authorities is vital if incumbent SME operators’ involvement is to be preserved under the shift from a deregulated market, a group of such businesses in West Yorkshire have said.
Provision for direct award is within the Bus Services (No.2) Bill in England, which is making its way through parliament. It will permit the award of an initial bus franchising contract to an existing operator without a competitive tendering process.
The Association of Bus Operators in West Yorkshire (ABOWY), which represents SMEs, has written to the West Yorkshire Combined Authority (WYCA) noting how for smaller franchise contracts – known as Tier B and Tier C in the region – direct award will be well suited as vehicles, drivers and other resources will already be in position, as will local knowledge.
Multiple SMEs have cosigned the letter, which underlines that for the smaller franchising contracts, responsibility for depots will lie with the successful operator, not WYCA. Direct award in the first procurement round could thus be “advantageous” for the Combined Authority, ABOWY adds.
WYCA has told routeone that its approach to franchising has been created in line with how legislation currently stands. It highlights how provision for direct award is yet to pass into law. The first round of contract procurement in West Yorkshire will launch in October.
ABOWY thus wants a short pause to work on the first Tier B and Tier C contracts until the bill gains royal assent. That is expected before the end of the year. Doing so would allow direct award to be introduced to assist SMEs, the Association notes.
Future unclear without direct award under bus franchising
WYCA says it has engaged extensively with bus operators “of all sizes” in drawing up plans for the franchised Weaver Network. Procurement “has been designed specifically so companies can bid for both large and small contract bundles, encouraging competition… and allowing smaller operators to develop and grow their businesses.”
A point of caution for ABOWY is the fate of the SME landscape in West Yorkshire if direct award is not utilised. In its letter to WYCA, the Association claims that of the SME bus operators in the region, two will not partake in competitive bidding for contracts, while three others are unsure.
ABOWY believes that if WYCA was to pause procurement of small contracts in the first round of franchising until direct award becomes possible, shorter mobilisation periods would ultimately deliver no effect on go-live dates.
Under that position, the Association says all of the operators cosigning the letter would be willing to continue as they do now, “even if the award is for two or three years rather than the full five or seven [years] proposed.”
Such an approach would allow them to adjust to new ways of working and for the Weaver Network to settle in. The Association believes that without direct award, a risk exists that SME bus operators in West Yorkshire will see a similar negative outcome to those in Greater Manchester under bus franchising.
SME loyalty to passenger remains against uncertain background
Among operators within ABOWY is Squarepeg Buses. Managing Director Simon Daymond says that he favoured adoption of bus franchising and believes that service delivery in West Yorkshire needs “a major overhaul.”
However, he calls into question the decision by WYCA not to utilise direct award. Squarepeg has a modern fleet and no driver shortage. Within its modest resources, the Leeds operator sees ongoing patronage growth and minimal customer complaints; most of the few received relate to delays caused by congestion.
“We are ready and prepared to bid for work when the time comes, but considering how franchising will bring disruption to passengers, I fail to see why our services cannot be incorporated into the franchising scheme and retained by us to mitigate upheaval,” he says.
My Daymond adds that SME operators feel a great deal of loyalty towards customers and thus continue to strive to deliver for them despite no certainty of future work under the approach that WYCA will take.
He has also questioned WYCA’s willingness to engage with those businesses. “We are repeatedly told that the only means of communication is via email. We wait weeks for an acknowledgement, and sometimes months for an answer to a question.”
Hand forced on direct award call, bus operators say
WYCA says it is committed to listening to any concerns raised during the franchising process and is continuing to work with the bus industry to improve services, “creating a better-connected region for everyone.”
But Mr Daymond claims that SMEs like Squarepeg have been “forced” into going public about their dissatisfaction. “We stand to gain nothing by keeping quiet and steadying the ship,” he concludes.
