Plans for bus franchising in the Liverpool City Region have been criticised by former Stagecoach UK Bus Managing Director Robert Montgomery. He describes the proposals as “bold on rhetoric and making a passable case for change,” but once beyond that says they “completely fall flat.”
Mr Montgomery, who now runs consultancy busreinvented.com and served as MD of Riyadh Public Transport Company in Saudi Arabia after leaving Stagecoach in 2017, has analysed the 558-page franchising assessment.
It was published in April and contains what Mr Montgomery says are “19 fundamental errors.” Many of those revolve around costs, with the most serious being what he describes as “no detail on where the more buses will run, how many additional buses and staff will be required, what they will cost and how they will be funded.”
‘Seriously underestimated’ risks in franchising assessment?
The former Stagecoach man believes that three cornerstones of Liverpool City Region Combined Authority (LCRCA) franchising aspirations – conversion to a zero-emission fleet, lower fares, and more services – are fraught with risk. He claims that many elements are unfunded or partially funded and that some costs are “seriously underestimated.”
Mayor Steve Rotheram has long espoused reregulation as the answer for the area’s bus network. He has regularly denounced existing provision, Earlier in 2023, Mr Rotheram described that as “too confusing, too unreliable and too expensive.”
Under LCRCA plans, franchising in the City Region would be rolled out in five tranches in a manner similar to that already underway in Greater Manchester.
The first tranche, based on St Helens, could see publicly-controlled buses start in September 2026. It is expected that Mr Rotheram will decide before the end of 2023 whether to proceed with the reregulation exercise.
Mr Montgomery believes that the assessment “is simply not fit for purpose, and any decision based upon it to proceed would be reckless rather than rational.” He continues: “[Franchising] is not financially sustainable without the ongoing injection of substantial, and, more fundamentally, unquantified amounts of public subsidy.”
Long-term costing projects questioned by ex-Stagecoach chief
Zero-emission buses are prominent in the LCRCA aspirations. “There is absolutely no detail about anything beyond where the zero-emission buses will come from, and even then, there is only £252.5 million provided for a fleet that will cost around £650 million,” Mr Montgomery says.
Proposed immediate fares reductions and then a commitment for future rises to be capped to RPI also come in for criticism in the analysis. He believes that costing those at zero over a 40-year period “is simply reckless and unsustainable,” given his experience that labour costs tend to grow at 1% above RPI.
Also highlighted is the small difference in projected patronage between a franchised network and one operated under enhanced partnership. The former Stagecoach man observes that this is one of a number of items highlighted by an outside audit of the assessment, and that it is “a critical point in the comparative merits of the proposals.”
Acceptance that bus franchising could be best for Liverpool CR
Mr Montgomery was ultimately responsible for Stagecoach’s bus operations in the Liverpool City Region until his departure from the group six years ago.
Despite his criticism of the franchising assessment, he acknowledges that reregulation may well ultimately be the best option for bus reform there.
“[My] analysis is not driven by any ideological objection to franchising, which is a perfectly workable method for delivering bus services,” he notes, although adding that franchising has “certain inherent characteristics of being financially expensive, weak on innovation and exposing consumers to the negative effects of monopoly pricing power.”
He continues: “This particular franchising proposal just happens to be very badly put together and completely fails to make the business case as required by the Bus Services Act 2017, either through accident or design. The formal assessment needs to be comprehensive and robust, thoroughly audited, and taken fully into account in any decision to franchise.”
Mr Montgomery claims that some evidence used in the LCRCA assessment is drawn from the “discredited” proposals for reregulation of bus services in North East England, which collapsed some years ago. The next step should be for LCRCA to rerun the franchising assessment before Mr Rotheram makes a decision on the future of buses in the city region, he believes.
Read Mr Montgomery’s full analysis of the franchising assessment here.
