Councils will be allowed to run local buses as Labour scraps Thatcher's ban

[kernowbususer]

The Mirror is stating that Labour is to allow Council’s to directly operate bus services.

Great provided that this is accompanied by the levels of funding required to run the buses at a level that covers costs. Few local authorities are in a financial position whereby they can start running bus services that have previously been withdrawn due to lack of use. This supposed magic wand to doesn’t change the most significant operating costs.

https://www.mirror.co.uk/news/politics/councils-allowed-run-local-buses-33620326

BUSES could be taken back into public control across the country under new rules to be unveiled by Labour on Tuesday.
Transport Secretary Louise Haigh says decades of Tory deregulation let firms “pick and choose” the most profitable routes, regardless of communities’ needs. Thousands of vital services have been axed, and passenger journeys have dropped by 1.5 billion a year.
Buses were privatised under Tory PM Margaret Thatcher in the 1980s. But since 2017, metro mayors have had the power to run their own. Manchester’s Labour mayor Andy Burnham launched the successful Bee Network last year. It increased reliability, introduced 24/7 services and boosted passenger numbers. Similar plans are under way in Liverpool and West Yorkshire.
It’s understood Labour’s rule changes would lift the ban on local councils setting up community bus companies. “My announcement next week will empower communities to take back control of their buses, and will drive up standards for everyone,” said Ms Haigh. “A new Buses Bill will follow, giving local leaders the tools to deliver on their local priorities, and help us end the postcode lottery of bus services which has failed passengers, communities and our economy. “And it will end the ideological ban on publicly owned bus companies imposed by the Conservatives.”

HEREVER you live, whatever age you are, buses can be a lifeline. Whether that’s getting to school or work, seeing friends or the doctor – buses are the lifeblood of communities and the engines of opportunity.
They can be the difference between aspiration and isolation. Between getting on or being forced to give up.
But four decades of deregulation has seen thousands of vital routes axed.
I’ve heard countless stories from people let down, of communities cut off, about opportunities missed, all due to poor bus services. I know how much this matters. That’s why this Government was elected. To rebuild Britain – and return our country to the service of working people. To fix what is broken.
I am not wasting any time. I promised to move fast and fix things, so next week I will be setting out the first stop on the journey to better buses, with steps to take back control.
For too long private operators have been allowed to pick and choose whatever routes they want, regardless of what communities need.
We want to see every area have the power to build a public transport network in a way that works for them.
We know this works. Just look at Greater Manchester’s Bee
Network, where buses were brought under public control just one year ago. Reliability has already improved, passenger numbers have grown, and 24/7 services have been introduced, helping the night-time economy. This Government won’t repeat the mistakes of years past.
My announcement will drive up standards and it is just the start.
We said we would deliver and we are. To those who put their trust in
Labour at the last election, they should know we will work night and day to get Britain moving again.

 

[mikeg]

Great provided that this is accompanied by the levels of funding required to run the buses at a level that covers costs. Few local authorities are in a financial position whereby they can start running bus services that have previously been withdrawn due to lack of use. This supposed magic wand to doesn’t change the most significant operating costs.

Indeed, though funding is being reviewed, I doubt it will be specifically for this purpose. Still we shall see either tomorrow or maybe later today. The Guardian says later today:

Local transport authorities across England will be able to run and control bus services under a Labour overhaul designed to “save vital routes”, parliament will hear on Monday.

The transport secretary, Louise Haigh, said the “bus revolution” would empower local communities as the government prepares formally to announce measures to make services more reliable.

...

The DfT said the buses bill will also include steps to improve accessible travel and provide greater flexibility over bus funding, to end the “postcode lottery” and bring better services for communities, whether or not local leaders choose to pursue franchising.

The Conservatives said the government’s plans were “unfunded” and would not increase bus services. Helen Whately, the shadow transport secretary, said: “They need to explain whether local authorities will raise council tax or make cuts to vital services like social care to fund this.”

Grauniad Article
The question is thus what exactly flexibility over bus funding means, I suspect even scrutinising the bill won't necessarily tell you too much as it will just enable delegated powers, as things like this often do, with how they're used being the issue. The main thing we will learn is how such funding could potentially be used, as well as details of how council control will work.

My main concerns, don't get me wrong I'm for this, are transport nimbyism whereby the 'whingeing motorist never been on a bus in their life' brigade oppose services which would have otherwise been provided commercially and cross border connectivity, whereby councils don't prioritise connections to other areas.

 

[stevieinselby]

As a number of councils already run their own bus services, I'm not sure what "prohibition" there was in place.
Not counting municipal operators like Reading or Lothian, bustimes lists 18 operators with "Council" in their names (about half of them in England), and while they mostly run minibuses there are some that have full-size vehicles as well.
Hopefully with more combined authorities coming in, there will be fewer instances of cross-border services not being funded because neither council considers them a priority.

 

[mikeg]

As a number of councils already run their own bus services, I'm not sure what "prohibition" there was in place.

The prohibition is largely on setting up a new operator, except as an operator of last resort (these are the ones with council in their name). Existing council owned bus firms such as Lothian, if they were to be privatised, would be a one way street.
Also there are no means for councils to regulate bus services, beyond through tenders. Note tenders are themselves not protected and that if a commercial operator sets up in its place, the tender musts be withdrawn. This can result in regulatory uncertainty, lack of regulation can provide less incentive to invest than a good regulatory system.

 

[Bletchleyite]

The prohibition is largely on setting up a new operator, except as an operator of last resort (these are the ones with council in their name). Existing council owned bus firms such as Lothian, if they were to be privatised, would be a one way street.
Also there are no means for councils to regulate bus services, beyond through tenders. This can result in regulatory uncertainty, lack of regulation can provide less incentive to invest than a good regulatory system.

I seem to recall there's also something that requires Councils not to fund/tender services in direct competition with commercial operations. I don't know if that's going or not, but it probably should.

 

[mikeg]

I seem to recall there's also something that requires Councils not to fund/tender services in direct competition with commercial operations. I don't know if that's going or not, but it probably should.

Hi, yes, I was just editing my post to make that clearer as you said that

If anything itshould be the other way round as it is for the railways, if it would be primarily abstractive from a public service obligation route (to use the jargon inherited from Europe), the commercial route shouldn't be allowed/should be throttled back. My understanding is that , if it's like when we were still in the EU at least, Public service obligation (ie. tendered) for airlines, competition was actively prohibited from commercial operators, but no aviation expert. What I'm saying is that in putting commercial, short-term services first, we've got it topsy turvy.

 

[GRALISTAIR]

The Mirror is stating that Labour is to allow Council’s to directly operate bus services.

Great provided that this is accompanied by the levels of funding required to run the buses at a level that covers costs. Few local authorities are in a financial position whereby they can start running bus services that have previously been withdrawn due to lack of use. This supposed magic wand to doesn’t change the most significant operating costs.

https://www.mirror.co.uk/news/politics/councils-allowed-run-local-buses-33620326

In my opinion, a great idea. Even if it does not happen straight away due to black hole on financing, it will/should really help the environment too.

 

[Meerkat]

Unless the funding is ringfenced when the councils need to cut budgets they will cut the buses, and what they cut will depend on council politics rather than commercials or logic.

 

[mangad]

The prohibition is largely on setting up a new operator, except as an operator of last resort (these are the ones with council in their name). Existing council owned bus firms such as Lothian, if they were to be privatised, would be a one way street.

Worth noting this prohibition only came in in 2017 as part of the Bus Services Bill that also introduced franchising. Before that there was no prohibition.

Without that, its possible authorities looking at franchising may have decided to bring all operators in-house.

 

[TUC]

I remember moving to Nottingham in the late 1990s and noticing how old and ugly (especially the very large front bumpers) the council owned buses were. However, when the private sector took a minority stake that changed immediately. Local authorities have not got a clue how to make services commercially attractive.

 

[yorksrob]

Unless the funding is ringfenced when the councils need to cut budgets they will cut the buses, and what they cut will depend on council politics rather than commercials or logic.

It usually depends on how many crumbs Westminster throws from the table, and whether these are enough to fund the statutory services that Councils have to provide.

 

[Whistler40145]

Blackpool Transport is wholly owned by Blackpool Council, so do they actually mean completely operated by a Council as a department?

 

[TUC]

Hi, yes, I was just editing my post to make that clearer as you said that

If anything itshould be the other way round as it is for the railways, if it would be primarily abstractive from a public service obligation route (to use the jargon inherited from Europe), the commercial route shouldn't be allowed/should be throttled back. My understanding is that , if it's like when we were still in the EU at least, Public service obligation (ie. tendered) for airlines, competition was actively prohibited from commercial operators, but no aviation expert. What I'm saying is that in putting commercial, short-term services first, we've got it topsy turvy.

Why? If an operator is prepared to run a service commercially, what advantage is there in a public body getting in the way and running the service itself?

 

[mikeg]

Why? If an operator is prepared to run a service commercially, what advantage is there in a public body getting in the way and running the service itself?

Because it would be abstractive and lead to destructive competition and undermine economies of scale. There's also the strong possibility it would be an inferior service or be withdrawn again (this actually happens quite a lot)

== Doublepost prevention - post automatically merged: 9 Sep 2024 ==

I remember moving to Nottingham in the late 1990s and noticing how old and ugly (especially the very large front bumpers) the council owned buses were. However, when the private sector took a minority stake that changed immediately. Local authorities have not got a clue how to make services commercially attractive.

I'm not sure, it works pretty well everywhere else. Also a portion was sold for an injection of cash (to Transdev I believe?). Councils have strict rules around both capital and revenue spend, and substituting revenue for capital isn't iirc permitted. I agree councils themselves are probably not the best vehicle for such services, this is in the absence of anything else. I'd much rather have a 'to each area its own PTE' approach, which works well in Germany, complete with franchising or sometimes direct ownership. They're also skilled at involving small to medium firms too.

 

[mangad]

Local authorities have not got a clue how to make services commercially attractive.

And, of course, it would be completely and utterly impossible for them to get those skills, wouldn't it...

Let's think this through. Why might a council not be able to make a commercially attractive service? Simple. Right now most of them don't need to.

Are they totally incapable of being able to do so? No. They simply need to hire the right people.

Across the country there are councils successfully running leisure centres, museums, theatres and other things. In the past many councils very successfully ran their own bus companies. It is not beyond the imagination for a council owned bus operator to hire some good managers who know what they are doing. And there's no good reason why someone wouldn't want to work for a council setting up and running new operations.

Yeah, some councils will do it badly. But hey, that's true of the private sector too.

 

[Megafuss]

What worries me is the speeding up of the process. At the end of the day it costs a LOT of money to run a bus service. It's not just about fuel and a driver. There needs to be proper scrutiny of plans to move to another system as in some areas, it may well be worse than what's in place now.

 

[RT4038]

Blackpool Transport is wholly owned by Blackpool Council, so do they actually mean completely operated by a Council as a department?

No. It is a company wholly owned by the council, and has to operate, by and large, on commercial lines.

And, of course, it would be completely and utterly impossible for them to get those skills, wouldn't it...

Let's think this through. Why might a council not be able to make a commercially attractive service? Simple. Right now most of them don't need to.

Are they totally incapable of being able to do so? No. They simply need to hire the right people.

Across the country there are councils successfully running leisure centres, museums, theatres and other things. In the past many councils very successfully ran their own bus companies. It is not beyond the imagination for a council owned bus operator to hire some good managers who know what they are doing. And there's no good reason why someone wouldn't want to work for a council setting up and running new operations.

Yeah, some councils will do it badly. But hey, that's true of the private sector too.

They could, but there are a number of obstacles preventing it in practice. Many councils have outsourced the management of leisure centres, museums, theatres etc. mostly for good reasons. They can hire good managers, sometimes, but they often don't stay for financial and political reasons. Working under a commercial business board is often (not always) a far cry from a transport committee formed of councillors. Such was the downfall of many a municipal bus undertaking both here and overseas.

 

[Bletchleyite]

Yeah, some councils will do it badly. But hey, that's true of the private sector too.

Very true. If Stagecoach is your local operator you might be quite happy. But if it is something like Aylesbury's execrable "Red Group" of small, badly run family businesses, a Council run operator might be quite appealing compared to walking (which is itself preferable than using one of these awful companies, assuming their bus even shows up, which based on my experience* last week** is by no means a given).

* Showed up ten minutes early and proceeded to take a completely wrong route.

** And historically when they ran Milton Keynes tenders, where early running and missing out bits of route was endemic - I was reporting them to the Council every week or more.

 

[3141]

As indicated in the contributions above, some councils would run bus services well and others wouldn't. There is no reason why council-run services should automatically be better than privately-run ones. In the (distant) past all the BET companies (Southdown, North Western, Ribble) were private ones, and although the THC companies (Eastern National, United Counties, West Yorkshire) were in public ownership they too were expected not to run at a loss. Council-owned companies were mostly in urban areas where there were more potential users of bus services.

Meanwhile, more people than in the dewy-eyed past have things called cars, which offer convenience and flexibility which public transport can rarely match.

This is another example of a collective belief in magical solutions. Some Labour-controlled areas will embrace the new approach because they believe in publicly-provided services. But they will only be better if (a) sufficient money is available to set them up and then run additional or reinstated services, and (b) competent people can be recruited to take charge.

 

[Man of Kent]

Worth noting this prohibition only came in in 2017 as part of the Bus Services Bill that also introduced franchising. Before that there was no prohibition.

Without that, its possible authorities looking at franchising may have decided to bring all operators in-house.

Actually banned by section 66 of the Transport Act 1985, but only for district councils. This allowed some county councils to run their own operations, especially after 1997 when grants for both capital and revenue were readily available, allowing buses to be purchased/leased and operations subsidised.

Most of the newcomer councils currently running buses do not use an Operator's Licence, but are on a Section 22 Permit or other exemption. They should display a white disc rather than the blue or green of a full O licence.

 

[edwin_m]

I remember moving to Nottingham in the late 1990s and noticing how old and ugly (especially the very large front bumpers) the council owned buses were. However, when the private sector took a minority stake that changed immediately. Local authorities have not got a clue how to make services commercially attractive.

Then, as now, Nottingham had some of the best bus services of anywhere outside London. The other places with council owned bus operators are generally above average too.

From https://www.nctx.co.uk/history:

1999: The last Leyland AN68 Atlantean type of bus operates on service 84 between City, Radford Road, Bulwell and Snape Wood on 27th November 1999, with a special commemorative DayRider ticket made available to mark the occasion. NCT's website launches. Since the first Atlantean entered service in 1964, a total of 390 had operated in the fleet, including those purchased from South Notts and Nottingham Omnibus.

So before...

2000: 31st March sees the Arrow Consortium sign the final documents to confirm it could finance, build, operate and maintain NET Line One. Transdev PLC achieve an 18% shareholding in NCT on the same date.

Although council owned operators have to operate commercially, they probably don't look for the same rate of return as private operators. And in the London market operators accept a lower rate of return based on the lower risk of being in a regulated market. Without those profits being taken out of the system, a decently run council in-house or franchised operator should do better than a similarly-run private operator.

 

[johncrossley]

If you are considering or already have franchising, such as London or Greater Manchester, why ditch private companies? The cost is driven down by competitive tendering.

 

[domcoop7]

And, of course, it would be completely and utterly impossible for them to get those skills, wouldn't it...

Let's think this through. Why might a council not be able to make a commercially attractive service? Simple. Right now most of them don't need to.

Are they totally incapable of being able to do so? No. They simply need to hire the right people.

Across the country there are councils successfully running leisure centres, museums, theatres and other things. In the past many councils very successfully ran their own bus companies. It is not beyond the imagination for a council owned bus operator to hire some good managers who know what they are doing. And there's no good reason why someone wouldn't want to work for a council setting up and running new operations.

Yeah, some councils will do it badly. But hey, that's true of the private sector too.

None of this answers the question 'why' though. Your local council could open a supermarket and compete with Tesco and Asda if they wished. But why should they? Particularly when as a public sector body they have an unfair advantage over the private sector and if it all goes wrong it is taxpayers who have to pay to fund it.

In terms of running a bus company, the council has to pay up-front capital costs to buy garages, depots, outstations, plant and equipment. It also has to buy or lease buses themselves and staff them. In a downturn it is much more difficult for a local authority to cut its losses than a private company so we'll have fully funded minibuses ferrying fresh air and drivers around with council tax rises, wealth taxes and cuts to other services to pay for it.

 

[RT4038]

As indicated in the contributions above, some councils would run bus services well and others wouldn't. There is no reason why council-run services should automatically be better than privately-run ones. In the (distant) past all the BET companies (Southdown, North Western, Ribble) were private ones, and although the THC companies (Eastern National, United Counties, West Yorkshire) were in public ownership they too were expected not to run at a loss. Council-owned companies were mostly in urban areas where there were more potential users of bus services.

Meanwhile, more people than in the dewy-eyed past have things called cars, which offer convenience and flexibility which public transport can rarely match.

This is another example of a collective belief in magical solutions. Some Labour-controlled areas will embrace the new approach because they believe in publicly-provided services. But they will only be better if (a) sufficient money is available to set them up and then run additional or reinstated services, and (b) competent people can be recruited to take charge.

The biggest issue is that, outside of the former PTE areas, the Local Transport Authority has no taxation powers to provide additional Transport services / cheaper fares etc - most of their current revenue and grants are being used to fund statutory services such as Education/education transport/Special Education needs and Adult and Child social care. There is no money to provide bus service subsidies outside of what they are doing at the moment (give or take BSIP money at present, but that is only for the next couple of years or so unless Govt. start getting generous). It will be no fun for councillors to try and run a bus service on a commercial basis (too many difficult decisions).

 

[johncrossley]

If buses are not tendered out, where is the incentive for a council operator to perform well? In London and Manchester, the private operators get rewarded or financially penalised according to performance.

 

[Bletchleyite]

If buses are not tendered out, where is the incentive for a council operator to perform well? In London and Manchester, the private operators get rewarded or financially penalised according to performance.

Civic pride? Lothian seems to have that by the bucketload.

 

[Cesarcollie]

Then, as now, Nottingham had some of the best bus services of anywhere outside London. The other places with council owned bus operators are generally above average too.

From https://www.nctx.co.uk/history:

So before...

Although council owned operators have to operate commercially, they probably don't look for the same rate of return as private operators. And in the London market operators accept a lower rate of return based on the lower risk of being in a regulated market. Without those profits being taken out of the system, a decently run council in-house or franchised operator should do better than a similarly-run private operator.

1. whilst the remaining municipalities are generally very good, you are forgetting some of the truly awful ones no longer with us. Survival of the fittest and all that……

2. London profits are less because buses are generally owned by TfL (LT type) or on operating lease - a cost which goes above the profit line, and means profit is not required to fund vehicle capex. So margins dont need to be as high.

 

[Egg Centric]

Very true. If Stagecoach is your local operator you might be quite happy. But if it is something like Aylesbury's execrable "Red Group" of small, badly run family businesses, a Council run operator might be quite appealing compared to walking (which is itself preferable than using one of these awful companies, assuming their bus even shows up, which based on my experience* last week** is by no means a given).

* Showed up ten minutes early and proceeded to take a completely wrong route.

** And historically when they ran Milton Keynes tenders, where early running and missing out bits of route was endemic - I was reporting them to the Council every week or more.

Exactly. Councils should certainly be allowed to give it a go.

I strongly suspect that as with most cases of council run stuff in most cases they won't be doing a great job largely as they won't be able to offer the salaries necessary for talent, but having the misfortune of occasionally using Red Eagle buses, another one of said group it's fairly obvious that private operators are also often unable or unwilling to attract talent so why shouldn't the council be able to try to take them on and do better?

 

[Ken H]

Before we get carried away lets not forget Halton Transport, council owned, which went bust in Jan 2020. Halton is the old boroughs of Widnes and Runcorn. Bus services in the area are now Arriva.

 

[Megafuss]

Civic pride? Lothian seems to have that by the bucketload.

Lothian are a commercial operator of course. Not enough civic pride to operate the 13 service on a commercial basis....