But some were small private firms, such as the Delaine and Fishwicks, and their routes became open to competition following deregulation. If you argue that incumbent operators should be compensated at franchising, you could argue that compensation for the loss of exclusivity should have been due to Delaine and Fishwicks in 1986.
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Greater Manchester Bus Franchising Assessment
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But some were small private firms, such as the Delaine and Fishwicks, and their routes became open to competition following deregulation. If you argue that incumbent operators should be compensated at franchising, you could argue that compensation for the loss of exclusivity should have been due to Delaine and Fishwicks in 1986.
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Bletchleyite
Veteran Member
Did anyone actually properly compete with either? Fishwicks, now sadly departed, operated the same route from Leyland to Preston with no expansion for absolutely years.
TheGrandWazoo
Veteran Member
I know it’s probably me being dumb but what are the sources for these comprehensive responses that you provide?
The abolition of licenses is obviously specifically cited but the issue of asset values on balance sheets?
Not that I can recall. Of course, there has/was always been the potential for competition.
TheGrandWazoo
Veteran Member
A false equivalence. It’s not about exclusivity in that respect. Delaine were in business before 1930 and are still now. Now let’s say TfL (Transport for Lincolnshire) decide they’re going to franchise and the first package of routes is based on Bourne and Stamford.
TfL decide that they’ll take the business and buy the depot. The package is then awarded to Stagecoach.
The Delaine have received the market rate for SOME of the assets. The rest is a fire sale and you’ve lost your business.
It’s not a great offer.
So maybe they should had to pay for the right to operate exclusively after 1930.
TheGrandWazoo
Veteran Member
Perhaps they should have but it’s difficult to change the past and much easier to influence the future.
They did have to, in effect, by having their fares and timetables regulated, and an expectation to cross subsidise loss making routes with those making profits. The right to operate exclusively came with many strings. We are not talking about an exclusive right to make big profits - the traffic commissioners saw to that.
Straw man arguments comparing the situation in 1930 to today.
TheGrandWazoo
Veteran Member
Correct on both counts
That's the point. There was no compensation in 1930, none in 1986, and none now.
TheGrandWazoo
Veteran Member
The situation is fundamentally different.
In 1930, you were provided with licenses that effectively removed competition providing an income albeit based on a model where uneconomical services were cross subsidised until the point in the late 1960s when the model began boughing under the weight. However, you had a business.
In 1986, you had that licensing regime removed so you had freedom to compete, expand, lose the uneconomic stuff. However, you had a business.
This is buying one of your assets, removing any advantage you may have, and if you’re not successful in your bid...you don’t have a business.
In 1986, a competitor could come along and take all your passengers. You no longer have a business.
What is the point of the private sector if we have to bail it out whenever things don't go to plan? There is an inherent risk in private enterprise.
TheGrandWazoo
Veteran Member
You could lose a business through competition but that’s a bit different from government sequestration.
This is not at all similar. Unless you were a particularly inept or hopeless operator, you would immediately respond to the competitive attack. It would be extremely rare for anyone to come along and 'take all your passengers'. Yes, the operator with the deepest pockets may well win, but at the risk of exposing parts of their network to a competitive attack. This 'attack' might happen to one or two of your routes at the same time, not your entire operation.
There obviously were risks, but not down to a single tender round.
There is an inherent risk in private enterprise. But unless we are prepared to accept operators making excess profits in the good times (not exactly popular with a section of the population) we must also be prepared to help them in the bad times. Can't have cake and eat it.
If the government didn't change the law to allow competition, the business wouldn't have been lost. Therefore, it is the government's fault.
Eh? We allow companies to go out of business all the time.
TheGrandWazoo
Veteran Member
No it isn't. Businesses fail for a myriad of reasons.
If a business is essentially taken into public control, compensation is usually paid unless the business is insolvent. Are you saying that the businesses so affected are trading insolvently?
Of course, but pushing them out of business by radically changing the rules so they have a onetime chance of survival is something else.
You thought the "take all your passengers" line was over the top, but surely this is too? Given the number of franchises up for grabs, incumbent operators have a great chance of winning routes and may even get more than they have now, with improved security of income.
See above. Most if not all companies can stay in business by bidding for routes.
TheGrandWazoo
Veteran Member
No, you don't stay in business by bidding for routes....only if you win.
As I noted earlier, if a business is essentially taken into public control, compensation is usually paid unless the business is insolvent. That's been the precedent in the past in any industry.
So what if Stagecoach (as this is pretty much the only significant company likely to get upset) win a lot of routes? Should they get compensation as well?
edwin_m
Veteran Member
If the government decides it will procure is paperclips through a single contract instead of separately for each department, then all the paperclip suppliers except the winner will have to find other markets or lose business and perhaps be left with a paperclip factory that they have no use for.
I don't see that it's any different for buses. The incumbents can bid for franchises in their own area or nearby, and if they don't win enough then they can take their buses elsewhere or sell them on. Not sure if TUPE applies for the staff but the incoming operators will have vacancies, and if compensation was doled out to failed bidders then I doubt the working level staff would see any of it anyway. Unlike the paperclip supplier the bus operator is guaranteed to have their premises bought out.
I don't see that it's any different for buses. The incumbents can bid for franchises in their own area or nearby, and if they don't win enough then they can take their buses elsewhere or sell them on. Not sure if TUPE applies for the staff but the incoming operators will have vacancies, and if compensation was doled out to failed bidders then I doubt the working level staff would see any of it anyway. Unlike the paperclip supplier the bus operator is guaranteed to have their premises bought out.
Bletchleyite
Veteran Member
It's very different. It's more like the Government deciding that all paperclips sold in a specific area will come from one supplier, and on top of that prohibiting other suppliers from selling their paperclips in that area even if that is the core of their business.
The odd thing is a Conservative government is behind this, and encouraging the mayor to pursue it.
Partly this is because it's somewhere up north, they've got other things to worry about and it's only buses which are only used by plebs.
However the principals behind what's proposed are not that far from what Labour want to do with the utilities and doing it this way (just paying for the transfer of fixed assets) is very cheap compared with what the CBI keep on suggesting it's going to cost. I suspect there will be a lot more people watching the process as the inevitable court cases happen.
Partly this is because it's somewhere up north, they've got other things to worry about and it's only buses which are only used by plebs.
However the principals behind what's proposed are not that far from what Labour want to do with the utilities and doing it this way (just paying for the transfer of fixed assets) is very cheap compared with what the CBI keep on suggesting it's going to cost. I suspect there will be a lot more people watching the process as the inevitable court cases happen.
TheGrandWazoo
Veteran Member
Classic question avoidance...
You can't choose which firms get compensated and which don't. Also, clearly Go Ahead Group purchased the Queens Road depot as a bridgehead, perhaps in the expectation that it would be a London style scheme of route tendering when they said "It also provides us with a platform to explore further opportunities in the region." - not much of a platform as would have essentially paid over £11m for a Grade 2 listed building that they would be obliged to sell to TfGM and some vehicles.
God forbid that the Tories might be up to something? Seem to recall the "big society" being a way in which to devolve responsibility locally. It just meant that when central grants were reduced, it was local responsibility to decide bus routes got withdrawn and what libraries closed.
As posted by @bussnapperwm in the First thread, the cross ticketing arrangement between First/Go Ahead/Diamond Bus is ending at the New Year.
This is a terrible decision for passengers, and hugely damaging to the idea of public transport as a network. Franchising can't happen soon enough.
This is a terrible decision for passengers, and hugely damaging to the idea of public transport as a network. Franchising can't happen soon enough.
TheGrandWazoo
Veteran Member
To be honest, I saw that and thought it was a very retrograde step. Rotala are (or were) part of OneBus who say....
"OneBus is a partnership representing bus operators in Greater Manchester, committed to improving travel as part of an integrated network that gets Greater Manchester moving".
You do wonder what goes through their minds at times....
Surely the Systemone travel card already does this?
Bletchleyite
Veteran Member
ISTR that specific bus companies teaming up in this way is actually seen as an illegal cartel. I'm sure I recall this being what put an end to the old SuperGEM tickets (which covered both First and Stagecoach as the former GM Buses operators).
TheGrandWazoo
Veteran Member
It can be done by a third party. TfGM arguably do it as System One and OneBus could do it as long as it doesn’t discriminate.
I can think of a few local authorities that have done this too.
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