Rollout of bus franchising in Cambridgeshire and Peterborough is set to follow a “hybrid pathway” involving a short-term direct award mechanism for incumbent operators of some services and later phased introduction of competitively-tendered franchise contracts.
An independent review of the implementation process was carried out by Steer and chaired by Leon Daniels. It was commissioned by Mayor of Cambridgeshire and Peterborough Paul Bristow in September 2025 in the context of a new fiscal envelope for bus service funding and implications of the Bus Services Act 2025.
Use of direct award is within the review’s conclusions, and Mr Bristow says that rollout of bus franchising in the region will be according to those recommendations. He adds that service reform in the region is “still on track” but notes how original plans “asked taxpayers to bear too much of the potential cost.”
Work on the review completed in January. A summary of findings was then presented to Mr Bristow and the Leader’s Strategy Group. The full report has been published among papers for a Cambridgeshire and Peterborough Combined Authority (CPCA) Transport Committee meeting on 17 June.
Among its findings and recommendations is a position that hybrid rollout will allow risk to be balanced, market participation to be encouraged, and the delivery of a smoother transition. Also considered in the exercise were the financial position around franchising, depot and fleet strategies, and an indicative programme.
A Strategic Delivery Plan (SDP) for the franchising shift has now set out “a clear, evidence-led pathway” for CPCA to guide that process “in a manner that is affordable, deliverable, and aligned with policy objectives,” papers for the 17 June meeting note.
The SDP is withheld from publication, but the papers say that in accordance with the review, it proposes implementation of franchising across three geographical areas, each with large and small lots.
Direct award of initial franchise contracts “on a number of services,” as permitted by the Bus Services Act, will enable the first franchised routes to be launched within the original target date of September 2027.
Other services are likely to continue under existing commercial or tendered arrangements until the relevant competitively tendered franchise contract takes effect. The overall result “is that franchising can be phased in, but not in the original way intended,” the papers state.
Large and small lots will be competitively tendered across three areas: central; north-west; and east. Cambridgeshire Guided Busway route are part of the central area, Peterborough is within the north-west zone, and Cambridge is in the east area.
Direct award services will launch in 2027 under the revised approach. Competitively tendered routes in the central area are planned to go live in 2028-29; in the north-west zone during 2029; and in the east area within 2030.
The papers observe that direct award is intended to support the franchising transition and not as a substitute for competitive tendering. Direct awards must be net-cost and may last for a maximum of five years. There is no obligation on an incumbent operator to accept.
A phased implementation reflects financial elements of the review, as do progressing with proposals for two CPCA-owned depots (in Cambridge and Peterborough), and revisiting the case for a fleet owned partially or fully by the Combined Authority to give “a balanced, realistic approach.”
Even so, the meeting papers note that CPCA acquiring vehicles “exacerbates a short-term funding gap,” and that further work on fleet strategy is required. “If the short-term financial impact cannot be mitigated, it would be a decision between reducing services in the short-term to protect the wider network in the long-term,” they add.
Depot ownership by CPCA “is critical to… a successful competition and therefore there is little point in a competition until Cambridge and Peterborough depots are open,” the review says, although it advocates reconsideration of a plan for a shared facility for two franchise contracts in Cambridge.
Smaller operators seek flexibility in depots. Steer thus recommends that they are provided by CPCA only for large franchise contracts. Its ownership for smaller lots is unnecessary, and the review recommends that successful bidders for those provide their own depots.
