Sunday 22nd March 2020
There’s no doubt bus and train companies are going to run out of cash pretty soon; it’ll vary depending on the strength of balance sheets and how much cash is available in bank accounts. For some small coach companies it’s probably already too late although many can now opt for the ‘business in deep freeze’ option with Rishi’s 80% wage deal but for others, large (including PLCs) and small, as explained in yesterday’s post, some semblance of ‘essential service’ has to be maintained and therein lies the problem – how to keep that going with virtually no revenue coming in. What little revenue there is will have dried up almost completely by next weekend as the ‘don’t travel’ message finally sinks in with everyone.
Reader warning: I’m about to use the ‘N’ word.
I’ve come round to thinking the only way forward is immediate part nationalisation of the bus and train industry.
We’re already almost there in the train sector with Network Rail, an expanding Operator of Last Resort and DfT exercising hands on control. We all know a Train Operating Company can’t even sneeze (into a hanky and bin it, of course) without DfT’s micromanaging permission.
The Government’s continued prevarication over the Williams Review means it’s now too late for whatever that recommended; companies running franchises are haemorrhaging cash and no doubt next week are going to be claiming the jolly old ‘force majeure’ clause to bring things to a head.
In the short term public ownership can be achieved by simply renegotiating the franchises into management contracts before setting up a British Rail run by senior career rail managers who can take back control as the management contracts expire in the medium term.
In the post apocalypse they’ll be able to take sensible decisions on what investment makes sense for the brave new railway world as I can’t see the £100 billion price tag HS2 going ahead in what will become known as the Great Depression of the 2020s.
On the buses the Government needs to take bail out shares in the PLCs rather like happened when it rescued the Royal Bank of Scotland and Lloyds Bank to keep them afloat in 2008 (that’ll also help with Go-Ahead and First’s rail involvement too). Non listed smaller bus companies like trentbarton, McGills, Safeguard, Ensign, Stephensons, Compass Travel, Midland Classic, West Coast Motors … it’s a long list … could opt to be bought out by Government on a fair value asset and (normal trading) goodwill basis or if they have strong balance sheets and plenty of cash, which they don’t mind altruistically spending on keeping their company ticking over for the next year, they could carry on ploughing an independent furrow, albeit in a barren transport land.
DB owned Arriva and Transdev could be offered a similar buy out for their British bus (and Arriva’s) and train interests.
Right now bus franchising seems an even more inappropriate way to be running buses. You need fleet-of-foot decision making by people who understand buses in times of a fast changing crisis but evidence shows local authority led franchising means sluggish, almost comatose, non decision taking, witness the current trajectory of Transport for Cornwall pushing ahead with enhanced rural services for introduction next weekend (see a comment posted below yesterday’s post) or TfL enhancing back street bus route 404 in Coulsdon yesterday with a trebling of its vehicle commitment from a 1 PVR hourly service to a 3 PVR half-hourly route. Totally crazy timing.
In the great bus franchising and regulation debate over the last decade I’ve resolutely followed the line it’s not about ownership or regulation it’s about working together in partnership to tackle congestion. Because it has been; and was. But that was then; this is now. The world has changed. Bus companies will soon be on the brink of collapse. Congestion has disappeared completely. It is now all about ownership and survival.
This would be a short term plan; and as with trains, when we all tentatively begin to travel again once ‘Covid Is Done’, probably some time in 2021, the next step can be taken to merge the ownership of First, Go-Ahead, National Express, Rotala and Stagecoach to form a new National Bus Company (and Scottish Bus Group combined) run by seasoned and well experienced entrepreneurial bus managers on behalf of the Government’s shareholding and those remaining private shareholders still with a stake.
Gradually the Government’s stake could reduce, but I would like to see their involvement as minority shareholders continue. It will be the ultimate ‘public private partnership’ and a great basis to rebuild public transport fitting for a Country that hopefully by next year, having experienced the shock of unpreparedness for a pandemic experts had predicted would definitely hit us one day, will be serious about resolutely tackling climate change and the critical role buses and trains must play in breaking our habit of being wedded to car ownership and use.
I never thought I’d be promoting the idea of ‘nationalisation’ of our industry having seen how dynamic and innovative private enterprise has been over the last 34 years in the bus sector but ‘we are where we are’ (as they say) thanks to Covid-19. The National Bus Company was a fantastic business to work for with some brilliant directors and managers (some not so good, admittedly). It was only held back being forced to continually fund its commencing capital debt and being reliant on the Government’s annual capital investment policy diktats meaning not enough nor the right buses were always purchased when needed.
We can learn from that in NBC Mark 2 and most of all avoid that crucial mistake of doing away with much loved local liveries and identities; not that that seems important just at the moment, but just saying!
Right; back to some reading. Good luck everyone working hard to keep buses, coaches and trains running out there next week. It won’t be easy.