Help should be in place for smaller bus operators to bid for franchising contracts
Leave nobody behind is an important principle of the bus industry. When picking up passengers at a busy bus stop, drivers try to make space for all – to ensure nobody is left standing out in the cold.
Those designing our industry’s new regulatory models could do well to remember that. Because it is vital that small- and medium-sized bus operators don’t find themselves left stewing at the roadside by the pace of change sweeping the sector.
Small enterprises are the beating heart of the British economy – they account for 99.8% of all businesses, three fifths of employment and half of the turnover of the private sector. In the bus industry, five nationwide companies operate more than 70% of routes.
Small- and medium-sized bus companies fill much of the rest, playing a vital role – in creating new markets and opportunities, and in adding flexibility, dynamism and entrepreneurship, ultimately benefiting passengers.
The future of independent bus operators has been brought to a head by the Bee Network in Greater Manchester where every franchise, with the exception of a single home-to-school contract, was awarded to a national operator.
The message, loud and clear, is that we value independent bus operators. Our industry cannot thrive without them
Smaller operators, watching that, see an existential threat. Under the Bus Services Bill, if you’re an SME and your business suddenly becomes a contracted service included within a broader franchise, you’re entitled to nothing in the way of compensation – your business, often built up through family generations, simply disappears overnight.
So the Confederation of Passenger Transport (CPT) has been working with the Department for Transport on principles to support SMEs and to make sure they continue to play a valuable role in bus services – whether that’s in an area that opts for an Enhanced Partnership or a franchised model.
Independent operators sometimes look at the blizzard of paperwork and cost required to bid for a franchise and simply say “that’s not for me”. But there are ways to make it easier.
Local transport authorities (LTAs) often require a series of policies to be put in place to take part in tendering – including modern slavery, human trafficking, social value, data protection and whistleblowing.
All are legitimate concerns – so CPT has suggested that DfT creates a suite of “off the shelf” template policies available that smaller operators can adopt.
Lot sizes in any competition are an important concern – in Manchester, the scale of the contracts was simply too large for many smaller operators.
So we are pushing for smaller lots to be included in every franchising competition as a matter of best practice and for the documentation required to be proportionate to lot size.
Where possible, questions should be based on a standard template. Further, as a point of principle, we have proposed that LTAs should be required to consider, and review, the impact on independent bus operators of the franchise model they choose.
We are making the case for an appropriate residual value mechanism to be adopted by LTAs – so that they guarantee a value for vehicles and depots, in areas to be franchised.
And there is a case, too, for consideration of joint ventures, to allow independent operators to bid for contracts alongside partners.
The direction of travel in our industry is toward more partnership working. But there needs, still, to be space for the market to operate.
Local businesses are far better placed than civil servants to spot emerging needs, to create an opportunity and to build a customer base.
So the message, loud and clear, is that we value independent bus operators.
Our industry cannot thrive without them, and it would be a fool’s errand to create an environment without room for entrepreneurs.
As a new era for the bus industry takes shape, CPT will fight to make sure there is room for everybody on board.
