Welsh government to reverse bus deregulation

sefyllian · 16 Jul 2019

Press release from the Welsh government, announcing legislation for the year ahead:

First Minister sets out legislative priorities to create a more equal Wales

A new law to reform bus services in Wales to ensure they meet the needs of the travelling public will be one of the Welsh Government’s legislative priorities in the year ahead, First Minister Mark Drakeford will announce today.

As part of the commitment to create a more equal Wales, the First Minister confirmed the Welsh Government will introduce a public transport bill to reform the planning and delivery of local bus services.

The bill will seek to reverse some of the negative impacts of de-regulation by enabling local authorities to franchise or run bus services directly.

It will be a key part of wider reforms to bus services and will help Ministers achieve their ambition of creating a truly integrated public transport network.

Also covered by BBC Wales here:

Plans for London-style bus system in Wales

A major shake-up of the Welsh bus industry is being planned by the Welsh Government.

Ministers want to boost services by introducing a London-style system where bus operators bid to provide services.

It could allow councils to dictate what bus services are provided, but there are concerns it could put some bus firms out of business.

New Welsh Assembly legislation is expected to be published within the next year.

I hope this works out. Competition on rural bus services doesn't seem to make much sense. Where I live, one of the bigger companies has managed to consolidate all the profitable routes for themselves, then just cancelled any they can't be bothered with anymore, leaving the council to patch up services as best they can. It's a real mess (impossible to buy a useful weekly ticket, for instance), and some villages have been practically cut off.

RailUK Forums

krus_aragon · 16 Jul 2019

The biggest advantage that I would hope for is the ability to mandate inter-available tickets. And not just between (franchised) bus operators, but with rail travel too.

It's also worth bearing in mind that the Welsh Government took a non-traditional approach to letting the Wales & Borders rail franchise.

And pulling a detail from the BBC article:

First Cymru, an operator of bus services in South West Wales, said: "Franchising is an unnecessary expensive and poor value tool that need not be developed - it effectively acts as a brake on investment and innovation whilst it sits as a threat to operators' businesses."

I'm sure their parent company's experience in operating rail franchises like GWR has informed their opinion significantly.

edwin_m · 16 Jul 2019

First Cymru, an operator of bus services in South West Wales, said: "Franchising is an unnecessary expensive and poor value tool that need not be developed - it effectively acts as a brake on investment and innovation whilst it sits as a threat to operators' businesses."

So they don't regard competition in the current deregulated market, intended to make open competition possible, as a "threat to operators' businesses"? That's not far off an admission that under the current system they can drive their competitors out of the market and establish a monopoly.

TheGrandWazoo · 16 Jul 2019

edwin_m said:
So they don't regard competition in the current deregulated market, intended to make open competition possible, as a "threat to operators' businesses"? That's not far off an admission that under the current system they can drive their competitors out of the market and establish a monopoly.

Competition is a threat that any business in any sector can seek to mitigate by being faster, cheaper, higher quality.

If it were your business, you’d seek to defend it?

DD12 · 16 Jul 2019

So , please excuse me if this is a stupid question, but, can we assume that IF First Group are hoping to sell First Cymru,

they will now find it (much) more difficult to sell, and get much less for it ??

Lynford1976 · 16 Jul 2019

Given the many smaller operators that have gone to the wall recently - largely, I hasten to add, through no fault of the "big boys" - I don't blame the Welsh government for doing this.

But, as always, the question has to be - who will be willing to pay for it?

Tetchytyke · 16 Jul 2019

TheGrandWazoo said:
Competition is a threat that any business in any sector can seek to mitigate by being faster, cheaper, higher quality.

We're still talking about First Group here, right? :lol:

TheGrandWazoo · 16 Jul 2019

Arctic Troll said:
We're still talking about First Group here, right?

Hence why I said any business in any sector!!!

FWIW, First Cymru is actually pretty decent in my experience.

radamfi · 16 Jul 2019

Interesting to note that municipals are have reservations about this. Cardiff Bus fear they could be wiped out by private companies tendering cheaper than them. Shows how Thatcherite this franchising lark is.

Robertj21a · 16 Jul 2019

sefyllian said:
Press release from the Welsh government, announcing legislation for the year ahead:

First Minister sets out legislative priorities to create a more equal Wales

A new law to reform bus services in Wales to ensure they meet the needs of the travelling public will be one of the Welsh Government’s legislative priorities in the year ahead, First Minister Mark Drakeford will announce today.

As part of the commitment to create a more equal Wales, the First Minister confirmed the Welsh Government will introduce a public transport bill to reform the planning and delivery of local bus services.

The bill will seek to reverse some of the negative impacts of de-regulation by enabling local authorities to franchise or run bus services directly.

It will be a key part of wider reforms to bus services and will help Ministers achieve their ambition of creating a truly integrated public transport network.

Also covered by BBC Wales here:

Plans for London-style bus system in Wales

A major shake-up of the Welsh bus industry is being planned by the Welsh Government.

Ministers want to boost services by introducing a London-style system where bus operators bid to provide services.

It could allow councils to dictate what bus services are provided, but there are concerns it could put some bus firms out of business.

New Welsh Assembly legislation is expected to be published within the next year.

I hope this works out. Competition on rural bus services doesn't seem to make much sense. Where I live, one of the bigger companies has managed to consolidate all the profitable routes for themselves, then just cancelled any they can't be bothered with anymore, leaving the council to patch up services as best they can. It's a real mess (impossible to buy a useful weekly ticket, for instance), and some villages have been practically cut off.

Have I missed the bit that says how the costs will be covered - extra taxes for everybody in Wales ?

TheGrandWazoo · 16 Jul 2019

Robertj21a said:
Have I missed the bit that says how the costs will be covered - extra taxes for everybody in Wales ?

Quite simple - just take the profits from all the big three evil conglomerates....that'll give you just over £10m. Mind you, given they're making about 10% and that in the franchised environment, you'd need to make about 7%, you can transform Wales with that £3m....not least wipe out the £2.5m that Cardiff and Newport municipals lost!!

Robertj21a · 16 Jul 2019

TheGrandWazoo said:
Quite simple - just take the profits from all the big three evil conglomerates....that'll give you just over £10m. Mind you, given they're making about 10% and that in the franchised environment, you'd need to make about 7%, you can transform Wales with that £3m....not least wipe out the £2.5m that Cardiff and Newport municipals lost!!

....but.....but....but.......aren't 'municipals' supposed to be the saviour of everything - and can explain to everyone else how it should be done etc etc........
I reckon we need a whole load of civil servants recruited who can sort out the all transport problems, based on their extensive understanding of such matters.

:rolleyes:

radamfi · 16 Jul 2019

All countries have deregulated buses, so there are no examples of public servants managing good bus/tram services anywhere in the world.

edwin_m · 16 Jul 2019

TheGrandWazoo said:
Competition is a threat that any business in any sector can seek to mitigate by being faster, cheaper, higher quality.

If it were your business, you’d seek to defend it?

The speed of the bus is largely down to traffic, and the only way to speed it up is to stop serving some people by taking a more direct route. In a few places there's a choice between cheap and nasty and luxurious but costly, but usually competing operators are much of a muchness. I think most people would sacrifice that element of choice to know they can get on the first bus that turns up rather than having to wait or pay again because it's a different operator to the one they bought a return ticket for that morning.

First can still win bus franchise tenders on the basis of being better, albeit by slightly different criteria, as they do in London. What they can't do is win by anti-competitive practices. In a deregulated environment the big groups can drive other operators out by over-bussing a route and charging silly fares which they can afford by cross-subsidising from the rest of the group but the small local operator can't. And once they have dominance they can prevent anyone else getting a foothold by exploiting the non-interavailability of tickets. For most people the service is actually better where there is a monopoly operator, because all buses in the area have interavailable tickets and the operator probably co-ordinates the service. But the passengers are probably paying more - and it's hardly the competitive spirit that deregulation was supposed to promote! And anyone who's not on a commercial route is left out in the cold.

Franchising gets rid of all this and makes entry to the market much easier, because winning a franchise gives a steady income stream over the franchise period (as long as the operator keeps the service quality up and avoids penalty payments).

edwin_m · 16 Jul 2019

radamfi said:
All countries have deregulated buses, so there are no examples of public servants managing good bus/tram services anywhere in the world.

Nearly every developed economy maintains regulation over its bus network, even places like the USA. The UK is probably the main exception.

Bletchleyite · 16 Jul 2019

radamfi said:
Interesting to note that municipals are have reservations about this. Cardiff Bus fear they could be wiped out by private companies tendering cheaper than them. Shows how Thatcherite this franchising lark is.

They would do well to lobby the Welsh Government to ensure the whole network has quality criteria. If they genuinely do "lowest cost" with no other spec at all, they will get utter dross - for some reason Wales has rather more than its fair share of disreputable small family operators, a number of which have been taken off the road recently for reasons of said disrepute (e.g. Express Motors' fraud case) but there are still plenty left.

If there's a decent quality spec, Cardiff Bus should do fine.

radamfi · 16 Jul 2019

edwin_m said:
Nearly every developed economy maintains regulation over its bus network, even places like the USA. The UK is probably the main exception.

Sorry, I forgot the smiley!

Deregulation wouldn't last very long in the US as there are too few captive passengers who have no choice but to use buses.

New Zealand was the only other exception in a rich country but deregulation ended there about 10 years ago. Auckland now even has a Swiss style multi-modal integrated fare system!

TheGrandWazoo · 16 Jul 2019

Bletchleyite said:
They would do well to lobby the Welsh Government to ensure the whole network has quality criteria. If they genuinely do "lowest cost" with no other spec at all, they will get utter dross - for some reason Wales has rather more than its fair share of disreputable small family operators, a number of which have been taken off the road recently for reasons of said disrepute (e.g. Express Motors' fraud case) but there are still plenty left.

If there's a decent quality spec, Cardiff Bus should do fine.

Yet if there's no money currently to pay for the current provision, how is that going to change?

Bletchleyite · 16 Jul 2019

TheGrandWazoo said:
Yet if there's no money currently to pay for the current provision, how is that going to change?

Unless they are doing it to cut costs, they would presumably not cut the spec in Cardiff from what Cardiff Bus presently operate?

The disreputable dross might have to stay in rural areas[1] but I see no case for a quality reduction - indeed, Traws seems to suggest otherwise.

[1] Though I'd really like to see a proper go at Snowdon Sherpa with a genuine view to reducing car journeys in the National Park. They'd do well to have a nose at what Stagecoach do (mostly commercially) in the Lakes - it really is very good.

edwin_m · 16 Jul 2019

TheGrandWazoo said:
Yet if there's no money currently to pay for the current provision, how is that going to change?

In rural Wales I imagine most of the services are tendered anyway, so not much will change. But at least they have the opportunity to throw money at the service if they want to, which is effectively impossible under deregulation.

In somewhere like Cardiff the service is mostly run commercially so the farebox covers the operating costs. As well as reducing the margins the monopoly operators can make, a franchise system if done properly should be better co-ordinated and more easily understood service with proper intergrated fares. This should attract more passengers and therefore more revenue. I agree however that it all comes down to how well it is executed.

TheGrandWazoo · 16 Jul 2019

edwin_m said:
In rural Wales I imagine most of the services are tendered anyway, so not much will change. But at least they have the opportunity to throw money at the service if they want to, which is effectively impossible under deregulation.

In somewhere like Cardiff the service is mostly run commercially so the farebox covers the operating costs. As well as reducing the margins the monopoly operators can make, a franchise system if done properly should be better co-ordinated and more easily understood service with proper intergrated fares. This should attract more passengers and therefore more revenue. I agree however that it all comes down to how well it is executed.

Except in Cardiff, revenue DOESNT cover costs - hence a loss last year of £2m

carlberry · 16 Jul 2019

If this happens we'll be reassured that all the services are in the hands of the kind of people who saw no issue with closing Cardiff's bus station without opening a new one, and are then surprised by the suggestion that this has had a negative effect on people using the bus in Cardiff!

Bletchleyite · 16 Jul 2019

carlberry said:
If this happens we'll be reassured that all the services are in the hands of the kind of people who saw no issue with closing Cardiff's bus station without opening a new one, and are then surprised by the suggestion that this has had a negative effect on people using the bus in Cardiff!

A bit OT, but the madness continues - the same thing is now being proposed for MK

The WG could really do with reversing this, but I bet they won't.

158756 · 16 Jul 2019

Bletchleyite said:
They would do well to lobby the Welsh Government to ensure the whole network has quality criteria. If they genuinely do "lowest cost" with no other spec at all, they will get utter dross - for some reason Wales has rather more than its fair share of disreputable small family operators, a number of which have been taken off the road recently for reasons of said disrepute (e.g. Express Motors' fraud case) but there are still plenty left.

If there's a decent quality spec, Cardiff Bus should do fine.

It might be though that someone else can do the same quality as Cardiff Bus for a lower price, but are currently dissuaded from entering the market by the dominance of the incumbent operator and potentially loyalty to the council bus company. Cardiff might fear, or perhaps know, that they are not the most efficient operator out there - certainly they don't have the economies of scale of First or Stagecoach.

Alternatively, since Cardiff Bus (or Newport, or any other small operator) are small and operate in a limited geographical area, a bigger group could bid below cost price, knowing that losing one round of contracts (or winning but making no money) will kill the smaller operator and allow bigger profits in the future.

Cardiff123 · 17 Jul 2019

krus_aragon said:
The biggest advantage that I would hope for is the ability to mandate inter-available tickets. And not just between (franchised) bus operators, but with rail travel too.

radamfi said:
Auckland now even has a Swiss style multi-modal integrated fare system!

This is exactly what Transport for Wales want to introduce as part of the South Wales Metro (and the 'North Wales Metro'), an integrated, pay as you go ticketing system with one ticket valid for all bus, train and tram travel within a given area. This will be impossible without bus and ticket regulation.

There were also plans for TfW to take over running/contracting out bus services across Wales, but I think that's now been dropped with councils being given those powers instead. But TfW will run the new bus station in Cardiff, when it finally gets built.

edwin_m · 17 Jul 2019

158756 said:
Alternatively, since Cardiff Bus (or Newport, or any other small operator) are small and operate in a limited geographical area, a bigger group could bid below cost price, knowing that losing one round of contracts (or winning but making no money) will kill the smaller operator and allow bigger profits in the future.

Even for one of the big groups, committing to run all the buses in Cardiff for a franchise period of several years at a financial loss would be a big hit. Much bigger than temporarily throwing buses and money at a couple of routes where a competitor is trying to establish themselves, with the option of reverting to normal once that competitor has gone if if they decide it's not going to work.

And if they did do that there's nothing to stop a group of experienced managers forming a new startup and bidding for a franchise. If they win it they have a low-risk income stream against which they can borrow to buy vehicles and hire drivers.

Journeyman · 17 Jul 2019

The SNP went on about doing something very similar in Scotland. It was party policy for years, but mysteriously disappeared after Brian Souter donated a few million to them.

quarella · 17 Jul 2019

carlberry said:
If this happens we'll be reassured that all the services are in the hands of the kind of people who saw no issue with closing Cardiff's bus station without opening a new one, and are then surprised by the suggestion that this has had a negative effect on people using the bus in Cardiff!

Cardiff managed without one till 1954. Bristol till 1958. That said I do like a bus station as it saves wandering the streets and hopefully would have information and facilities.

Belperpete · 17 Jul 2019

I support this in principle, as it would allow the Assembly more sensible control than they are allowed under the current deregulated regime. However, I do have concerns. Over-regulation can lead to things become fossilised as they are, or worse still, steadily cut back. The Conwy Valley rail service being a case in point. While the Assembly do seem to be open to innovation in running of new services, will this always be the case?

Will private operators be allowed to innovate? Will they be allowed to run a novel service that they think may be popular? Or will TfW look to protect "their" services against outside competition? Allowing unelected bureaucrats and their party-political masters sole control is rarely a good thing, no matter how good their intentions.

Reynolds12 · 17 Jul 2019

I can see Cardiff/Newport Bus potentially coming under the TfW 'brand' as part of the south wales metro, if it's ever realised.

Welsh government to reverse bus deregulation

Member

RailUK Forums

Established Member

Veteran Member

Veteran Member

Member

Member

Veteran Member

Veteran Member

Established Member

On Moderation

Veteran Member

On Moderation

Established Member

Veteran Member

Veteran Member

Veteran Member

Established Member

Veteran Member

Veteran Member

Veteran Member

Veteran Member

Established Member

Veteran Member

Established Member

Established Member

Veteran Member

Established Member

Member

Established Member

New Member