A New Era Bee-gins

Tuesday 26th September 2023

It was back in 1986 the 56 year old system of bus route licensing and regulation outside London came to an end heralding in a new market led deregulated era of bus provision.

GM Buses was sold to the private sector eight years later.

The new deregulated system immediately attracted vocal critics, many in the PTEs who’d lost overall control of the network and were quick to highlight wasteful competition in some of the larger conurbations where newly privatised bus companies, along with opportunistic new entrants to the market, chased each other down main roads in a foolhardy competitive race to gain passengers while leaving less remunerative routes with reduced services.

Despite those initial skirmishes soon abating and becoming such a rarity over the last couple of decades the Competition and Markets Authority felt compelled to launch a full on Investigation into the “Local bus services market” in 2011, the clamour to return to some form of regulatory control has continued pretty much unabated for the last 37 years.

This call has ignored the increasing number of bus operators working effectively in partnership with local authorities which (aside from Covid) has successfully and consistently grown the market for bus travel in a range of towns and cities as well as seeing significant growth along many inter-urban corridors. This success has come about through a combination of entrepreneurial flair from experienced bus managers passionate about their work using high profile marketing promoting improvements in product delivery including frequencies, fare offers, new buses and excellent customer service alongside dedicated local authority officers and courageous politicians willing to introduce effective bus priority measures, attractive bus stop infrastructure along with parking controls and enforcement so bus passengers are favoured over motorists where doing so is for the overall public good.

The one ‘fly in the ointment,’ particularly in the last decade, has been the consistent reduction in those bus services funded by local authorities which meet social needs but would never be a commercial proposition whatever innovative ideas were conceived to stimulate the market (including DRT). Campaign for Better Transport research assessed (aside from Covid) 52% of local authority supported bus miles were cut between 2011/12 and 2019/20 compared to just 5% of commercially operated bus miles.

That 52% reduction in service provision was not due to the deregulated regime but simply reflected a lack of public funding.

When you see the scale of cuts in Government funding to local authorities during that period it’s no wonder time has been called on bus routes which few people use. Local authorities simply haven’t been able to justify the cost when statutory priorities such as social care and housing obviously take precedence.

Alongside this trend it didn’t help that some senior people in the bus industry exploited the new freedoms during the early deregulated era without taking account of wider social implications of providing, what our industry is regarded by most people as, a “public service”. They misguidedly prioritised short term gain for shareholders rather than long term interests of bus passengers. The importance of serving an overall market across a coherent network, particularly the need to run services at less profitable times of the day and week, was wrongly sacrificed in some high profile cases.

This got deregulation a bad name not least in Greater Manchester where industry observers in the mid 1990s to mid 2000s noted the conspicuously different approach adopted by First Bus towards bus provision in the north of the city and that in the south of the city served by Stagecoach.

It wasn’t deregulation that failed Greater Manchester. It was the attitude and approach adopted by senior executives at First Bus in the 1990s prioritising short term profitability, which ironically they never achieved.

While in the south of the city, Stagecoach pursued a growth policy of lower fares (Magic Bus) and frequency enhancements, in the north we saw a ‘slash and burn’ raise fares and cut service approach.

Meanwhile the local authority and Transport for Greater Manchester prioritised resources into its tram network rather than delivering much needed comprehensive bus priorities to go with the nice new bus stations.

Indeed the establishment of the Metrolink tram in 1992 and its subsequent significant expansion over the last 30 years inevitably abstracted significant numbers of passengers from the conurbation’s bus network during that time. That reduction had nothing to do with deregulation.

But it comes as no surprise that on Sunday, Greater Manchester became the first Authority to “take back control” using powers under the Bus Services Act 2017 and introduce “London style” public control of service provision, fares and revenue with the private sector’s role diminished to one of being a contractor running pre-specified services after a competitive tendering process to obtain the work.

Before discussing the new era that’s begun this week and it’s likely prospects, I should conclude this snapshot assessment of the last 37 years by observing those critics of deregulation have always conveniently ignored the undeniable fact that by the 1960s and 1970s passengers were deserting buses at an alarming rate as car ownership inexorably grew alongside an extensive programme of road building and Government policies favouring motoring as an aspirational means of travel.

Other social trends including the growth in home entertainment (through television), reductions in the working week (six days to five) and the growth of out-of-town retail parks also played their part.

By the early 1980s the industry was characterised as being in an institutionalised spiral of decline with regular above inflation fares increases coupled with reductions in service levels needed to balance the books leading to further decreases in passenger numbers resulting in more fares increases and service reductions. These characteristics applied irrespective of who owned the bus company – whether it was one of the many municipals, the state run sector (National Bus Company or Scottish Bus Group) or the myriad of small independently owned bus companies all over the country in the private sector – yes, even in those regulated days there were private sector owned buses.

There is no doubt by 1986 the regulated licensed system of running buses had become completely unfit for purpose. Without change the industry was facing oblivion.

Rather than the regulated regime being the ‘golden era’ it had become a lame duck method of transport provision. I remember seriously wondering in the mid 1970s whether bus travel would see out my hoped for career in the industry for the next 40 years.

Against all that background, for better or for worse, here we are in 2023 on the cusp of another new era for bus operation. As Andy Burnham put it yesterday at the launch: “a new dawn for transport in Greater Manchester.”

And it’s interesting the nuance has changed from bringing back buses under public control to “under local control”. When I last looked earlier this month buses in Greater Manchester run by Diamond, Go North West, Stagecoach, Transdev Blazefield, Vision etc were very much “under local control”.

But that locally based entrepreneurial flair driven by a private sector discipline of being fleet-of-foot to adapt timetables, ticket prices and technology in a changing market, and be passionate about service quality and passengers is no longer relevant to bus provision in Manchester. Instead we have a large army of well meaning publicly employed officers accountable to an elected Mayor making all the decisions impacting bus provision and who in turn stands or falls by the democratic process at the ballot box.

That all sounds highly appropriate for something, as said earlier, that is seen as a ‘public service’, and while passengers will increasingly notice all their buses are painted the same shade of pale yellow and there’ll be lots of hype about tickets being available on both buses and trams (as they had been prior to Sunday, of course), the main dynamic which has shifted this week is nothing to do with the colour of the bus or the type of ticket. It’s the fact the revenue risk of running a bus network comprising getting on for over 180 million passenger journeys per annum has passed from the private sector to the public sector.

Until Sunday it was down to Arriva, Diamond, First Bus, Go North West, Stagecoach and a myriad of smaller bus companies to manage that risk taking the hit in the bad weeks below budget, and banking the surplus in better weeks. Revenue is never static. It varies as much as the Greater Manchester weather does. In fact the weather can be a major factor determining whether revenue is up or down on last year. Economic conditions including buoyancy of retailing and employment, school attendances, medical appointments and many more reasons to travel can also all fluctuate and impact demand and hence revenue.

Not much else in the public sector, which local authorities are responsible for, sees revenue vary to such an extent. Council tax and funding from Government are pretty much fixed from one year to another or even longer. Those income streams don’t vary depending on whether it’s pouring with rain or one day saw particularly bad traffic congestion.

This new era is certainly going to be a novel experience for Transport for Greater Manchester (which until now has just had Metrolink revenue to worry about). It’s going to call for a whole new culture.

Bearing in mind the seismic changes in travel patterns post Covid (still around 80%) coupled with inflationary cost pressures, it’s no surprise there’s been a sea change in attitude towards the new regime from private sector bus companies. Whereas just in recent times Diamond and Stagecoach instigated costly legal proceedings against Transport for Greater Manchester’s plans, now they’re beating a path to the letter box to submit their tender prices and which, based on experience in the first couple of tranches, I’m guessing will see even keener prices for a hotly contested third tranche in the south of Manchester so they can get their desired market share and be part of the action.

Transport for Greater Manchester staff must be thinking they can’t believe their luck to have these private companies putting in ever keener prices to run the services it wants to be provided.

But for the bus companies it’s a win win, if they win. No longer needing to worry about revenue risk, their shareholder owners will be pleased to have a guaranteed income (assuming the margin has been priced in correctly) and nor do they need to worry so much about the challenge of running buses in a congested city like Manchester which for years has lacked decent bus priority on a comprehensive scale.

Sure, there are financial incentives and penalties if the quality of service suffers but as we’ve seen in London, bus companies are adept at dealing with that – either by the annoying “the destination of this bus has changed/this bus will terminate here” type actions or simply building more buses into the schedule and charging the Authority more for the pleasure of running a slower service (just as annoying to passengers).

For staff who like to be loyal to their employer the new era brings in a another new dynamic. Unlike in London, where bus companies bid for one route at a time, the Greater Manchester model involves whole bus depots full of work being tendered and changing hands between bus companies as we’re already seeing with Bolton changing from Diamond to Go North West and Wigan from Stagecoach to Go North West yesterday with Queens Road soon to go from Go North West to Stagecoach. That must be very unsettling for staff with concerns over pay rates and pensions not least as staff at Bolton and Queens Road are, or shortly will be, on to their third employer in four years (First Bus selling out in 2019 following its offloading of Wigan in 2012).

Furthermore I dread to think how much time and energy has been devoted over the last few months by bus company managers firmly into mobilisation mode recruiting staff, getting their heads round all the requirements of operating from new bases and taking over buses from other operators (by the way, you’ll never find a fleet engineer praise a bus that he/she inherits from another depot, let alone another company).

Meanwhile staff at Transport for Greater Manchester have also devoted thousands of hours over many years to all the bureaucracy of setting up the new regime.

We’re talking well north of £100 million of costs so far and from the passengers perspective for what? A different colour bus and in due course perhaps a different name for a combined bus and tram ticket they could have purchased previously.

Even the timetable leaflets are the same unenticing boring funeralistic design. And the colourful maps you can see in the racks in Bolton bus station?

They’re showing cycle routes. There are no maps for the newly branded Bee Network of bus routes

Nor is there a Manchester city centre information point any longer with the Piccadilly Gardens outlet now a shop selling scooters. Still, at least that’s promoting “active travel” I suppose.

Just imagine if all that money, energy and work hours in setting this new regime up had been devoted to everyone working in partnership to radically improve customer service and introduce extensive bus priority measures across the conurbation with Go-Ahead, Diamond and Stagecoach combining their experience and skills to work collaboratively together on marketing campaigns to show a high profile ‘joined up’ network rather than the rather ineffectual “one-bus” brand that was latterly dreamt up a few years ago and was far too little and much too late.

I had the pleasure of attending the grand official launch of the new Bee Network at Bolton Town Hall yesterday morning and Mayor Andy Burnham was once again on great form, as he was at the recent conference I chaired and blogged about.

There was much back slapping and smiles all round with everyone delighted ‘control’ had been taken back.

As you can see from earlier photos, even Parliamentary Under Secretary of State for Transport Richard Holden was there and in buoyant mood (obviously pleased not to be talking about HS2).

Andy Burnham is definitely the one big asset for this new era, being a high profile politician showing passion for buses in a very public way. That is definitely a very welcome development and something buses (and passengers) need. You can count the number of high profile politicians prepared and happy to associate themselves with buses in the way Andy is on the fingers of half a hand.

I’m a great believer in strong high profile leadership from someone based locally who has high credibility and can talk up buses. I tried to do this in Brighton during my time there (ironically I had “local control of buses”) and it’s why I despair when the ‘big groups’ reorganise their businesses so managing directors run ever larger companies across unmanageable geographic areas becoming anonymous to the local population they purport to serve.

Another worrying trend among those same ‘big groups’ over the last few years is recruiting people from outside the passenger transport industry into senior roles. While there’s nothing wrong with having some outside input, the balance in some companies has gone too far and there’s a definite expertise gap further adding to the understandable disquiet among deregulation critics.

An excited Andy Burnham told the recent Public Transport North conference I chaired he sees Manchester heralding in a new “golden era” for buses in Britain with expectations Merseyside, West Yorkshire, South Yorkshire as well as Cambridgeshire and Peterborough Combined Authorities will follow down the same route. He’s probably right about the latter – Oliver Coppard, the Mayor of South Yorkshire was at yesterdays launch with his own personal media entourage, for example ….

… but I’m not sure about the former (ie a “golden era”)

Imagine if there’d been a high profile ‘Mr/Mrs/Ms Bus’ with vast experience of the industry leading truly customer orientated private sector bus companies, being constantly in the media and in tune with local communities in Greater Manchester for the past 20 or 30 years.

But that bus full of possibilities has long left the terminus. We are where we are. In the short term, passengers won’t see any changes to timetables but will enjoy continued subsidised cheaper fares and ticket prices. Andy reckons what he calls the “London style” model of cheap fares and frequencies will be enough to get motorists to switch to buses and thereby improve air quality without any need for controversial ULEZ style measures. He’s also very bullish about meeting the targeted 30% increase in bus use in Greater Manchester by 2030.

I wish Andy Burnham the best of luck and very much hope he succeeds.

A couple of words of advice to conclude: firstly, keep a close eye on that passenger revenue each day. Because the mega millions Government funding that has been showered down on Greater Manchester to enable all this to come to pass inevitably won’t last. It never does. As with the weather, showers come to an end. Ask Sadiq Khan.

Secondly use the expertise in the bus companies to advise on such things as timetables, route developments, customer service and bus design. They have a wealth of knowledge and experience which mustn’t go to waste as mere contractors providing buses and drivers. For example, the lower deck interior layout on the 100 shiny new ADL electric double deck buses entering the Bee Network fleet isn’t very passenger friendly.

There are just 21 seats (including one tip-up) and whilst a large open area is great for (two) wheelchairs and buggies, it’s hopeless for those unsteady on their feet trying to access just four ordinary accessible “priority” seats (plus one tip-up) without a step. Whoever signed off on that design has not travelled extensively on buses and seen how passengers use them.

I reckon crunch time for the Bee Network (and any others back in ‘public control’ in other conurbations) will be around 2029 when initial tenders have been relet with bus companies seeking much greater margins at the same time as an incoming Conservative Government, following five years of Labour, will take one look at the subsidy bill and decide there must be another way to run buses……

Roger French

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