Work around bus franchising is ramping up, with the contract procurement process having begun in West Yorkshire and market engagement efforts in other locations pushing forward.
SME operators’ position in franchising is gaining political traction. Those authorities that are progressing reregulation will be well aware of messaging that a repeat of the outcome seen by those businesses in Greater Manchester, where SME involvement in the region’s bus network was decimated via franchising, is considered undesirable.
How that pans out in practice remains to be seen. Some incumbents in areas that will franchise still fear a rerun of the Greater Manchester situation. Their concerns are easy to understand, and they will chime with many small- and medium-sized operators.
Subcontracting has been mentioned as an avenue to secure SME involvement: a large operator holds the contract with the local authority and then engages with SMEs to provide a portion of mileage.
Some figures believe that subcontracting is a valid way to progress, pointing to similar – albeit not franchised – work in Cornwall where Go South West successfully uses three SMEs to deliver parts of the county’s network. Outside Cornwall, little has been heard about appetite for subcontracting. Whether it will feature in coming awards is thus unclear.
Meanwhile, a group of operators active in West Yorkshire are calling on the West Yorkshire Combined Authority (WYCA) to adopt the direct award approach that will be advanced by the Bus Services (No.2) Bill in England for award of franchising contracts.
They believe that if direct award is used, it will allow incumbent SMEs to transition relatively easily into franchising. Those businesses already have vehicles, staff, premises and local knowledge. Upon retender in five or seven years, they would have built experience of a franchised regime and be in a good position to bid.
A fly in the ointment is that direct award will not be possible until the bill becomes an act, which is expected (but not guaranteed) before the end of 2025. With WYCA having opened the procurement process its first round of contracts, it has made clear that bringing direct award into that process would represent a big change of direction.
The Combined Authority also questions the compatibility of direct award with the region’s agreed franchising model and even suggests that it would restrict ability to make changes to services once franchised operations commence.
But that aside, drafters of the Bus Services (No.2) Bill have included direct award for a reason. Ministers and Department for Transport bus chief Stephen Fidler have noted how franchising will have many forms and no one-size-fits-all model.
While WYCA may not be biting on direct award, other areas should pay close attention to it. Direct award represents a clear way to cement SME operator involvement in bus franchising – which, as the industry is now often told, is a significant priority.
