A reverse move for First

Saturday 2nd July 2022

First Bus has announced a major shake up of the management structure of its subsidiary companies which will cut costs particularly senior managers and overheads. It’s a laudable aim as Government Covid financial support comes to an end in a couple of months time and with passenger numbers still 80% of ‘normal’ expectations a raft of cuts to services is inevitable in the autumn.

But, oh dear, oh dear, if rampant inflation and industrial unrest are taking us back to the bad old days of the 1970s, First’s proposed reorganisation has all the hallmarks of recreating the disastrous period for the Group in the 1990s when management became ever more remote from operations on the ground due to completely unworkable mergers of the company’s operating areas along with centralised edicts and overbearing control.

And here we go again.

The proposals include merging the managements of First in the South West with First in Dorset, Hampshire and Berkshire. South Wales will be added to the West of England (which is Bristol and environs) as well as Worcester being thrown in for good measure. Essex and East Anglia are back together again to form East of England – as they were run as one until it didn’t work last time round so were split up. Midlands (ie Leicester and the Potteries) already under common management with South Yorkshire following the last relatively recent reorganisation will have Manchester added in as well (albeit that’s now down to one depot and soon to be franchised too, so could disappear altogether – or on the other hand expand dramatically). West Yorkshire gets York back again, while Scotland remains as one unit as it has been since Aberdeen was added to Glasgow and Livingston a while ago, well why not, they’re in the same nation. There’s no indication where Ireland’s Aircoach network fits in.

It could have been worse. In the last period when big regional companies under ‘simplified management’ were regarded as the best way to run what we all know are very much local businesses dependent for success on local knowledge and local relationships with partners and stakeholders, one poor hapless managing director at First Bus had to control an area stretching from Penzance via Bristol round to Porthcawl and Haverfordwest as well as across to Portsmouth. Now, Penzance through to Slough will be a thing (a mere 285 miles apart) albeit without Bristol this time, but the cinch of running a small network such as Bristol (irony alert) will be supplemented by adding in Worcester, Bridgend, Swansea, the Valleys and Haverfordwest – only a snip of 170 miles between them.

I don’t know how to say this without sounding like a dinosaur, an armchair critic, an out of touch grumpy old retired busman or someone obsessed about the past and not in touch with the future but ….. this proposal is simply wrong in every respect.

There’s the usual load of verbiage justifying it in an announcement from Janette Bell – managing director of First Bus – to her senior team stating “by consolidating 10 Senior Leadership Teams of various size and reshaping into 6 more balanced Local Business Units we will also be able to strengthen our leadership capability and create local businesses that have the right level of resources to be sustainable”.

I beg to disagree Janette. All the experience shows the more remote your managing directors (sorry, “Senior Leadership Teams“) are from their local areas where buses are running, staff are employed and partners and stakeholders live and work the less effective the bus networks are and a downward spiral of passenger loss and service reductions (and profits) becomes inevitable. Far from “strengthen our leadership capability” it will weaken it to the point of making it unfit for purpose.

Exactly as was found when this was tried before in the 1990s.

According to the letter to colleagues “this is not a process to simply cut roles or reduce cost, far from it…….this is about creating six new businesses that are ready to lead us into the future, with confidence and clear expectations”.

It won’t.

And just to show how homogenised it’ll all be “to set each of the Local Business Units up for success, they will also have a standardised Leadership Team structure, to improve decision making and provide clarity on roles and responsibilities”.

This claptrap is straight out of the business school theory of management efficiency beloved of external management consultants who know nothing about how best to run buses and who’ve no doubt been working on these proposals for months at eye watering fees that now have to be justified by reducing the headcount of productive managers (who do know about running buses) and their costs.

The proposals are currently being consulted on “with our leaders who may be affected by these changes so they have a chance to share their thoughts on the plans and express their personal preferences”.

Yeah, right. So your future career at First Bus depends on speaking out and telling it how it is on these ridiculous and unworkable proposals. I don’t think so somehow, not least as there are 10 “Leadership roles” morphing into six!

I do hope the consultants haven’t looked around and decided Arriva’s slimmed down management structure overseeing local operations and commercial decision making and an unhealthy reliance on out of touch centralised control is the cost saving model to imitate. It isn’t.

And I’m not sure how reassuring it is for Janette to advise “we will run a fair and thorough process to ensure we have the right colleagues in the right leadership roles for our business to succeed in the future”. I hear the whole process, including making the appointments of new “leaders”, has been contracted out to an external agency. Which wouldn’t, by any chance, be related to the management consultancy which recommended the changes would it?

Interestingly in the same week announcements have been made of dramatic cuts to timetables in South Yorkshire for a post Covid financial support world (with no doubt more to follow in other areas of the country) Jeanette writes “we remain focused on increasing our drivers and maintaining our engineering colleague numbers and have a whole host of activity lined up to increase frontline appointments”. Sounds like those management consultants at work again.

Here’s an alternative suggestion to cut costs, which may not go down well with some, but I reckon is justified and will definitely reduce costs …. cut senior directors’ “remuneration packages” by 20% and cut out any “performance bonuses”. Salaries and bonuses now paid to managing directors and senior executives throughout the public transport industry are grossly over inflated and I’d much rather see more locally focussed managing directors retained and paid less (there are plenty of keen young managers who’ll be happy to do the roles if current ones don’t want to) than have less roles but paying eye watering remuneration. And a cull of centralised head office roles can’t come soon enough either, together with a moratorium on engaging “outside agencies” with their six or seven figure annual fees too.

Janette advises other staff “this change doesn’t impact anyone outside of our leadership population, so please remain focused on your role. The more we can pull together, support each other, and staff focused on delivering for our customers , the better we will emerge”.

It had all been looking so much better at many of First’s bus companies in recent times with strong local identities coming to the fore implemented by re-energised local managers released from the overpowering and misplaced centralised diktats of the Lockhead era.

As a customer I look forward to Janette’s promised “better delivery” once these latest reorganisational proposals are implemented (which they’re sure to be notwithstanding the current “consultation”) and I hope my pessimism at their negative impact will be proved wrong.

Sadly, I don’t think it will be.

Roger French

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