Contingency large depots CPO plan in Liverpool bus franchising

The Liverpool City Region Combined Authority (LCRCA) plans to open work on a compulsory purchase order (CPO) process as contingency to acquire land for large bus depots within the conurbation’s forthcoming franchising regime should existing voluntary negotiations fail.

All bus depots for large franchise contracts awarded under the regulated Metro Network will be owned by LCRCA. Such a step is described as “crucial” for successful rollout through provision of a level playing field for bidders.

Depots for large franchise contracts – termed Category 1 by LCRCA – will then be leased to operators at a “peppercorn” rate. Winners of smaller, Category 2 contracts – with a PVR of up to 22 – will be responsible for providing depots under the plans.

It will not be allowed to operate a Category 2 contract from the same location as a Category 1 award, according to proposals in a report on a market engagement event held in late 2024.

LCRCA has “been working to assemble a bus depot estate and [has] commissioned analysis of potential sites as part of the Bus Franchising Depot Strategy,” papers published ahead of a meeting of the Combined Authority on 7 March show.

Elected members at that gathering are recommended to approve commencement of the contingency CPO process. If authorised, the compulsory purchase work will sit alongside what LCRCA says are positive negotiations with a range of landowners for the depot estate.

Further information on CPO arrangements is within an appendix that has been withheld from publication by LCRCA. Whether the voluntary negotiations and parallel CPO process capture existing large depots in the conurbation is thus unknown, but it is thought likely.

“Given the accelerated delivery plan for franchising, it is recommended that a CPO process commences while negotiations continue,” the papers note.

Acknowledged is how CPO scope could introduce “an adversarial aspect” to voluntary negotiations, but LCRCA maintains that running the two in parallel “can help to mitigate against intransigence, providing a contingency plan if voluntary negotiations fail.”

As broken by routeone in mid-2024, Mayor Steve Rotheram has brought forward rollout of bus franchising in the Liverpool City Region. That calls for the first Metro Network buses to operate in September 2026 and completion of the exercise in 2027. It was originally expected that the latter point would be reached in November 2028.

The market engagement event report notes that participating operators are “in full support” of the Combined Authority owning depots used for Category 1 franchise contracts.

Reasons for that include removal of barriers to entry, benefits to long-term planning, and reduction of capital burden for newcomers. For Category 2 franchises, strong support has been received from operators that depot provision lies with the winning bidder.

On fleet, it is proposed that Category 1 awards will see successful bidders provided with what is expected to be a mix of new and existing buses by LCRCA.

Vehicle policy for Category 2 contracts to deliver ‘general’ services is still being determined; either LCRCA or the operator could ultimately hold that responsibility. For home-to-school-only Category 2 awards, it will sit with the operator.