Bill Hiron, Chair of the Association of Local Bus Managers (ALBUM) and Policy Advisor Tony Depledge explored the future of the bus industry, with an emphasis on franchising, in a Masterclass Theatre session at Euro Bus Expo on 14 November.
The discussion came immediately after a keynote address by Transport Minister Simon Lightwood, who articulated the expectation that local leaders will be able to make more decisions about bus services in local areas, with funding being promised to back that.
ALBUM highlights two challenges here: Establishing the skills that local authorities (LAs) require in order to exercise that new control constructively, and the financial resources needed to be able to do so.
Avoiding failures
A warning was sounded by Mr Depledge that the greatest failure of deregulation during the 1980s was the divergence of bus operators and LAs which led to a competition for road space.
While ALBUM acknowledges an agnostic approach to ownership structure, any landscape that opens an opportunity for LAs to own, set up or acquire bus companies needs correct governance.
“The LA landscape is littered with the carcasses of failed LA companies,” Mr Depledge explains, saying one of the focus areas must be on improving the few remaining municipal companies, which means taking away restrictions on borrowing. “I don’t want to see LAs setting up bus companies that are going to fail, so part of that is getting the basic rules right.”
Franchising focus
Another element of the government’s pledge to “take back control” is of course franchising, which ALBUM recognises has much of the traditional sector “nervous”.
Mr Hiron says this naturally stems from the landscape in London and now Manchester, where independent operation is “non-existent” and “all but wiped out,” respectively.
Whether politicians should care, he suggests, is another matter.
“There is no absolute right for SMEs to continue in existence,” he acknowledges, caveating that statement by extolling the benefits of SME involvement in the bus sector. That includes strong local knowledge, commitment to high quality, and the strength of SME performance in the routeone Awards.
In order to ensure government acceptance of SMEs in a franchised environment Mr Depledge points to the Procurement Act 2023, with which operators should familiarise themselves. ALBUM calls for further guidance to be issued on procurement to simplify the process some way to ensure SMEs are not overburdened by what are voluminous, and in some cases irrelevant, administrative requirements through what is “an extremely complex and bureaucratic” prequalification process.
“Big operators can take these [policies] off the shelf,” Mr Depledge adds. “When ALBUM commented about this in Manchester, where the SME sector has been wiped out by franchising, we highlighted it as not acceptable and not in line with what government is saying. It is also not in line with two pieces of procurement law, which say that the interests of SMEs should be considered when structuring contract work.”
Another worry from ALBUM is on LAs that are reluctant to make a decision on the future of bus structure in their regions. That leads to uncertainty on investment, as many existing operators will be reluctant to invest in new vehicles if it is unknown whether a franchise agreement risks taking them away.
Mr Depledge finished his talk with a lesson from history, and recommends an examination of the Tramways Act 1870 as an example of how easily legislation can “stifle innovation and stifle investment”.
