Are Nexus (Tyne and Wear) about to introduce a Quality Bus Contract Scheme? (October

[Jonny]

If the (Newcastle) Evening Chronicle is to be believed, it seems that Nexus (formerly Tyne and Wear PTE) are close to going ahead (no pun intended) with their plans for a Quality Bus Contract, given their recent interest in a site in Felling, East Gateshead.

http://www.chroniclelive.co.uk/news/north-east-news/nexus-eyes-up-felling-site-10206256
Nexus eyes up Felling site among others as potential base for massive new bus depot
The firm has its eye on sites across Tyne and Wear for new depots should a new London-style transport system be introduced in the North East...

It seems that Nexus are serious about this; the article seems a bit sketchy about the detail though. I am wondering if the new depots plan is a way to deal with one or more bus companies pulling out and selling/relocating assets. Does anyone else have more info?

 

[Stats]

Under the QCS, bus services will be franchised in 11 lots, each based on services from an existing depot. This depot based approach is designed to minimise the adverse impacts on existing operators. However, Nexus accept that incumbent operators have an advantage in bidding for services, and so to provide a level playing field they are identifying land for new depots that would be available to new and existing operators. It is for each succesful bidder to decide which depot they will use. If QCS is approved, Nexus will be looking to move quickly and start the procurement process by the end of the year.

This is the only detail available on new depots, from the Nexus report to NECA on 21 October 2014.

Nexus has changed the procurement structure and process in light of
Consultation feedback (see Section 9.6). The revisions seek to
ensure incumbent Operators are not materially disadvantaged, but
that they and new Operators are able to bid for contracts on a level
playing field. Nexus recognises the potential advantage that
incumbent Operators have in owning depots and vehicles in the Tyne
and Wear area. While it was suggested that Nexus should provide
depots to remove this advantage, the acquisition of existing depot
sites by Nexus is not considered affordable or desirable. However,
alternative approaches to the provision of depots or suitable land
sites, which would be available to all bidders, are being investigated
in partnership with the local authorities. Neither is it considered
appropriate for Nexus to acquire vehicles for use by Operators of
Quality Contracts. All Operators may have to invest in fleet
replacement to meet the age and emission levels requirements
within the specification. As Operators use a variety of methods to
acquire buses, from outright purchase to rental or leasing, over the
whole life of the contract Operators supplying new vehicles should
not be disadvantaged against incumbents with vehicles already in
place.

Nexus (formerly Tyne and Wear PTE)

Not formerly, Nexus are still legally Tyne and Wear PTE but trade under the Nexus name.

 

[the101]

It seems that Nexus are serious about this; the article seems a bit sketchy about the detail though. I am wondering if the new depots plan is a way to deal with one or more bus companies pulling out and selling/relocating assets. Does anyone else have more info?

Yes, they are serious about it. The QCS can only happen if it is approved by an independent QCS board and the first such hearings have already occurred; it is not yet approved, nor are there any definite signs that it will be, which makes Nexus more than a little premature in this depot development.

Having sat and listened to the someone very senior from either Nexus or the North East Combined Authority (can't remember which one) babble on at the UK Bus Summit earlier this year about QCSs, the only conclusion that I was able to draw was that Nexus are quite scandalously naive when it comes to these things, and they genuinely do think that they will get a better service out for no more money going in. Nexus also seem to be labouring under the assumption that operators will be falling over themselves to run franchise tranches for next to no profit.

If this QCS is approved, the whole thing will end in tears. It is, sadly, yet another example of dim-witted local politicians thinking they know a lot more than they actually do.

 

[ChathillMan]

Interesting. Go Ahead Group own he new depot, not Go North East. They could sell if they wanted.

Looking back at events i do wonder if an SQP would have been the way forward for companies to fight for rather than a VPA

 

[Robertj21a]

Hopefully, common sense will eventually prevail in the North East. I've seen little evidence so far that the authority up there has any real ability to take on the role they aspire to.

 

[the101]

Hopefully, common sense will eventually prevail in the North East. I've seen little evidence so far that the authority up there has any real ability to take on the role they aspire to.

The people at Nexus have not a shred of ability, understanding or anything else concerning running buses, which is why the whole thing will end in tears should it be approved. The whole saga is local politics at its worst.

 

[Tetchytyke]

I don't think Nexus are as cluless as you think. They've enough about them to know that the big three operators have all been ripping them off for years. Stagecoach and Go make huge profits up here- Stagecoach's margin is well over 20%- and Arriva would be too if it wasn't for huge "admin costs" being diverted to Germany. The big three up here have become far too comfortable, and they all need a big boot right up the backside.

That said, I don't think the QCS will happen. I think the bus companies will do enough to stave it off, but I think the threat will be good for consumers up here. Already all the big three have invested in new buses- even Arriva, who've previously just relied on a succession of shonky London conversions- and that's only a good thing.

 

[ChathillMan]

I don't think Nexus are as cluless as you think. They've enough about them to know that the big three operators have all been ripping them off for years. Stagecoach and Go make huge profits up here- Stagecoach's margin is well over 20%- and Arriva would be too if it wasn't for huge "admin costs" being diverted to Germany. The big three up here have become far too comfortable, and they all need a big boot right up the backside.

Can you give an example of the bus companies "ripping off" nexus

 

[Tetchytyke]

I believe I already did. Arriva's "strategic" accounting to reduce their tax liability in the UK- all the while arguing that they dont make money so Nexus are wrong- is the best example. Or the anti-competitive carve-up between Arriva and Go...

I've said before I don't think a quality contract is a good idea at all, but the idea that Nexus are clueless and the bus companies arent taking us for a ride isn't right IMHO. The bus companies here have had it too easy for too long.
--- old post above --- --- new post below ---
I'd also add that the bus companies are more than happy to take Nexus' conditions for tendered services; both Go and Arriva have plenty of Nexus branded buses for their tendered services. I don't see how the companies can say it'll be a disaster the rest of the time.

 

[TheGrandWazoo]

I believe I already did. Arriva's "strategic" accounting to reduce their tax liability in the UK- all the while arguing that they dont make money so Nexus are wrong- is the best example. Or the anti-competitive carve-up between Arriva and Go...

I've said before I don't think a quality contract is a good idea at all, but the idea that Nexus are clueless and the bus companies arent taking us for a ride isn't right IMHO. The bus companies here have had it too easy for too long.
--- old post above --- --- new post below ---
I'd also add that the bus companies are more than happy to take Nexus' conditions for tendered services; both Go and Arriva have plenty of Nexus branded buses for their tendered services. I don't see how the companies can say it'll be a disaster the rest of the time.

David

Firstly, let's prioritise Facebook before going after Arriva

Secondly, you do like to keep banging on about Stagecoach's profit margins but this is on Nexus's own website.. http://www.nexus.org.uk/sites/default/files/30079 TEC Operating Cost Analysis 2012.pdf

"It is appropriate to look briefly at reported profit margins. The reported profit margins are shown in Table 7 below for the period of TAS analysis (2008 to 2011 inclusive). All three main operators have improved their financial performance year on year Arriva Northumbria’s poor performance in 2009 has turned round into 2010, but the underlying cost and revenue has barely moved – the reported improvement results from ‘other operating income’ of£1.5m in the year.

Stagecoach Busways and Go North East performance has improved with increased turnover more than matching increased operating costs. Internal
recharges from Stagecoach Services Ltd (for admin support and procurements services) are not wholly included; thus reported profit at Busways may be overstated. Weighting individual company profits by fleet size gives us an average Tyne & Wear profit margin of 12.36%. "

So yes, the idea that Nexus can commission some work that clearly shows that the profit margin is not in excess of 20% but nearer 12% and that the differential between this and open book margins is not great YET they still think the "moon on a stick" is achievable is either naive or disingenuous.

Oh, and anyone who knows the area will be aware that Arriva's Newcastle operations are a) the weakest in T&W and b) the weakest in Arriva NE. The fact is that the real earners in Arriva NE are the SE Northumberland to Newcastle routes and around Durham City. Hence why Jesmond depot didn't get much new fleet though I concede the 306 (the one good route) was overdue its new machines.

 

[Tetchytyke]

It's an interesting document you quote, one I've used before to point out some of Arriva's "interesting" accounting.

I don't think the bits you have quoted say what you think they say though. The adjusted profit margin is based on the reported company profits and fleet size, nothing more and nothing less. Given that Stagecoach have a relatively small fleet and both Arriva and Go do not, that would figure.

A better quote for the point you are making is probably this one:

Straightforward acceptance of accounts data is, we believe, unwise, for both Arriva Northumbria and Stagecoach Busways. Arriva Northumbria’s proportion of staff costs, at 65.3%, is simply not credible. This implies that overhead, fuel and maintenance costs are around a third of the level of the other two companies if we adopt CPT’s cost breakdown figures for ‘other’ costs.

Arriva Northumbria’s accounts show 99 administrative staff (from 115 in
2009), equal to 20% of the number of drivers, with a similar figure at each of Arriva Durham County, Arriva Tees & District and Arriva Teesside. We have made an adjustment to the accounts figures by subtracting administrative expenses of £3,229,400 from the ‘staff costs’ total and reallocated it as overhead costs.

In addition, operating cost of the support company Arriva North East totalled
£152K in the year to December 2010. We have made the assumption that one third of this should be accrued by Arriva Northumbria and added a further £51K to its overhead costs. It appears that administrative staff costs are increasingly being borne by Arriva Northumbria.

The area of concern with Stagecoach Busways relates to depreciation and
leasing charges. Given its ongoing large investment in new vehicles we would not expect depreciation to constitute only 7% of costs (which in turn leads us to calculate much higher overheads at Stagecoach Busways). The accounts make reference to additional ‘Hire purchase’ costs and we are aware of Stagecoach’s group approach to financing new vehicles.

Although we do not know for certain that this figure relates wholly to vehicles we have adjusted the accounts figures to add this sum to ‘depreciation and leasing costs’. This produces cost estimates much more in line with expectations. Although this revised figure is slightly higher than the other two operators, this does reflect fleet replacement rates.

Arriva Northumbria shows a disproportionately high proportion of costs
allocated to depreciation and leasing, but we accept this following significant
fleet investment and a high proportion of leasing of vehicles rather than
purchase. The revised figures produce the numbers shown in Table 2.

If we then look at Table 2, TAS reckon Stagecoach are spending about another £450,000 a year on depreciation compared to the stated accounts, equivalent to about 1% of their total operating cost of £45m. That would undoubtedly mean that the profits at Stagecoach are overstated, perhaps by one or two percentage points, but certainly not twelve percentage points.

Oh, and anyone who knows the area will be aware that Arriva's Newcastle operations are a) the weakest in T&W and b) the weakest in Arriva NE. The fact is that the real earners in Arriva NE are the SE Northumberland to Newcastle routes and around Durham City. Hence why Jesmond depot didn't get much new fleet though I concede the 306 (the one good route) was overdue its new machines.

You're quite right, Jesmond tend to have the local routes round the estates in Newcastle and North Tyneside with the juicy routes being operated mostly from Ashington and Blyth. Jesmond tend to have the shonky buses as a result. That makes sense.

The juicy routes are seeing investment though. Blyth's X10 and X11 are MAX and the X7, X8 and X9 are about to be converted. It's similar with the good routes out of Ashington depot being Sapphire or MAX; even the 35 got some new buses. The juicy routes in Durham, Sunderland and Peterlee are seeing Sapphire or MAX too.

FWIW the out-of-town express buses are why I don't think Quality Contracts are a very good idea. The local buses in Tyne and Wear don't make the money, it's the express buses to Ashington, Morpeth, Blyth, Consett, Hexham, etc. Quality Contracts are only going to separate the local buses out from the express buses which subsidise them. That isn't going to end well.

The exception, of course, is Stagecoach, who operate all the city buses in Newcastle and most of them in Sunderland and South Shields. And I think the margins that they make- even if they are overstated- are what is attracting Nexus to quality contracts. I can see where they're coming from with that, tbh.

ETA I still firmly believe that Nexus are using QCS as a threat to focus minds, a threat which has to be credible to work. And I'd say it is working; even Stagecoach have free WiFi on (some) of their buses now.

 

[TheGrandWazoo]

It's an interesting document you quote, one I've used before to point out some of Arriva's "interesting" accounting.

I don't think the bits you have quoted say what you think they say though. The adjusted profit margin is based on the reported company profits and fleet size, nothing more and nothing less. Given that Stagecoach have a relatively small fleet and both Arriva and Go do not, that would figure.

A better quote for the point you are making is probably this one:



If we then look at Table 2, TAS reckon Stagecoach are spending about another £450,000 a year on depreciation compared to the stated accounts, equivalent to about 1% of their total operating cost of £45m. That would undoubtedly mean that the profits at Stagecoach are overstated, perhaps by one or two percentage points, but certainly not twelve percentage points.



You're quite right, Jesmond tend to have the local routes round the estates in Newcastle and North Tyneside with the juicy routes being operated mostly from Ashington and Blyth. Jesmond tend to have the shonky buses as a result. That makes sense.

The juicy routes are seeing investment though. Blyth's X10 and X11 are MAX and the X7, X8 and X9 are about to be converted. It's similar with the good routes out of Ashington depot being Sapphire or MAX; even the 35 got some new buses. The juicy routes in Durham, Sunderland and Peterlee are seeing Sapphire or MAX too.

FWIW the out-of-town express buses are why I don't think Quality Contracts are a very good idea. The local buses in Tyne and Wear don't make the money, it's the express buses to Ashington, Morpeth, Blyth, Consett, Hexham, etc. Quality Contracts are only going to separate the local buses out from the express buses which subsidise them. That isn't going to end well.

The exception, of course, is Stagecoach, who operate all the city buses in Newcastle and most of them in Sunderland and South Shields. And I think the margins that they make- even if they are overstated- are what is attracting Nexus to quality contracts. I can see where they're coming from with that, tbh.

It is a weighted average so they have attempted to incorporate those factors and state the caveats.

Nexus have spun the information at various times. The +20% figure has been used prominently when the truth is somewhat different. However, so too is the fact that operators receive £xm of public money as if it's some sort of subsidy when the majority is payment for services provided in whatever way (e.g. ENCTS).

 

[Tetchytyke]

It is a weighted average so they have attempted to incorporate those factors and state the caveats.

No, they've just weighted it based on stated accounts, so it doesn't take into account Arriva's gigantic admin team (conveniently based in Germany) nor does it take into account Stagecoach's special way of accounting for new buses.

That said, across Tyne and Wear 15% sounds about right, and it compares very nicely indeed to London.

Nexus have spun the information at various times. The +20% figure has been used prominently when the truth is somewhat different. However, so too is the fact that operators receive £xm of public money as if it's some sort of subsidy when the majority is payment for services provided in whatever way (e.g. ENCTS).

Of course Nexus have spun things, it's all part of the game. Although ENCTS money is a difficult one to quantify; it's not a subsidy, agreed, but it's not really a payment for services provided either. And it is a big chunk of Nexus' bus budget, so it must be galling to see 20% of it walk off up the road to Bellwood House.

But the bus companies are playing the same game; nobody really believes that Nexus will have to find a £100m slush fund or that Nexus will be bankrupt in five years under QCS.

 

[ChathillMan]

Personally speaking if NEXUS want a "London style" bus system as politicians call it then they need to find a way of funding it.

Only 40% of TFL revenue comes from fares. I don't see how such a low level of direct contribution from fare payers could be justified in the North East.

 

[TheGrandWazoo]

No, they've just weighted it based on stated accounts, so it doesn't take into account Arriva's gigantic admin team (conveniently based in Germany) nor does it take into account Stagecoach's special way of accounting for new buses.

That said, across Tyne and Wear 15% sounds about right, and it compares very nicely indeed to London.



Of course Nexus have spun things, it's all part of the game. Although ENCTS money is a difficult one to quantify; it's not a subsidy, agreed, but it's not really a payment for services provided either. And it is a big chunk of Nexus' bus budget, so it must be galling to see 20% of it walk off up the road to Bellwood House.

But the bus companies are playing the same game; nobody really believes that Nexus will have to find a £100m slush fund or that Nexus will be bankrupt in five years under QCS.

Of course, the figures used by TAS/Nexus were 2010 and so wouldn't have involved Germany...

ENCTS is a payment for services used by passengers.

Also, the idea that Nexus can procure at a level that provides the figures that they say they'll get to pay for what they promise is fanciful... Said it before, you want something like London, then you have to fund it like London.

 

[Tetchytyke]

Personally speaking if NEXUS want a "London style" bus system as politicians call it then they need to find a way of funding it.

Only 40% of TFL revenue comes from fares. I don't see how such a low level of direct contribution from fare payers could be justified in the North East.

Everything costs money. The numbers don't stack up as well as Nexus claim, but not as badly as the bus companies claim.

I think it is possible to have more control without it having to be as in depth as it is in London nor costing as much as it does in London. Bear in mind that TfL deliberately choose to keep bus fares low- £1.50 would get you about four stops in Newcastle- and the commercial companies are proving there's plenty of money to be made in the north east.

I think that QCS is a solution looking for a problem, but at the same time I think the bus companies in Newcastle have charged high and invested low for far too long. The threat of QCS seems to be changing that, which I suspect was the intention all along.

 

[Volvodart]

http://http://otp.investis.com/clients/uk/stagecoach/rns/regulatory-story.aspx?cid=273&newsid=589221

Decision by Tyne and Wear QCS Review Board

Released : 03 Nov 2015

RNS Number : 3273E
Stagecoach Group PLC
03 November 2015

3 November 2015

Decision by Tyne and Wear Quality Contract Scheme Review Board

Stagecoach Group plc ("Stagecoach") welcomes the decision of the Tyne and Wear Quality Contract Scheme Review Board ("the Review Board") that the bus franchising scheme proposed by the North East Combined Authority ("NECA") has failed to meet the necessary statutory tests.

Stagecoach also believes the decision has clear implications for bus franchising powers linked to the government's devolution programme. The forthcoming Buses Bill must provide a legislative framework for enhanced partnerships, and ensure any franchising proposals are subject to proper safeguards and a transparent public interest test.

Nexus, the transport executive of NECA, had proposed that bus services should be franchised in Tyne and Wear through the letting of contracts, with local taxpayers assuming the risk of the local bus network. This approach would have replaced the current successful system where services are largely commercially funded by bus operators.

The Review Board received a written request to consider the Tyne and Wear scheme on 22 October 2014. It subsequently reviewed the consultation responses to the proposed scheme and held oral evidence sessions involving Nexus, bus operators and other parties.

The independent Review Board's remit was to provide an opinion on whether the proposed scheme - which has a 10-year operating cost of £1.6 billion - meets statutory public interest criteria, and whether due process has been followed.

Any scheme must demonstrate that it will:
result in an increase in the use of bus services in the area;
bring benefits to bus passengers by improving the quality of local bus services;
contribute to the implementation of the local transport policies of the Local Transport Authority;
contribute to the implementation of those policies in a way which is economic, efficient and effective; and
ensure any adverse effects of the proposed scheme, such as on bus operators, will be proportionate to the wider benefits to people in the area.

The Review Board report contains wide-ranging and fundamental criticisms of the bus franchising proposals in Tyne and Wear, which failed to meet key practical and financial tests. The main findings are that:
the franchising scheme failed to satisfy the core test of being economic, efficient and effective. The Review Board remarks that the effectiveness of Nexus' scheme has been "significantly overstated", with similar benefits able to be achieved under operators' partnership plans. In addition, the Board criticises Nexus for "reverse engineering" in an attempt to justify its proposals
the Review Board is "not convinced that the scheme is affordable". Indeed, the Board states that "it appears more likely than not that the scheme will run into funding issues and that will put pressure on fares and the network"
Nexus has failed to demonstrate that its proposals will lead to an increase in bus use, or even reduce or arrest decline
while the Review Board ruled that the scheme met the test on providing benefits, the Board noted that "any quality improvement whatsoever" would, as a technicality, satisfy this criterion.
although the Review Board believes the scheme contributes to the implementation of local transport policies, it raises "concern" over the financial viability of the scheme.
the Review Board said it had "no hesitation" in concluding that the "negative impacts on operators are wholly disproportionate to the benefits" to bus passengers and citizens of Tyne and Wear. Furthermore, the Board says it finds it "highly unlikely" that Parliament intended such schemes to lead to such harsh impacts on individual businesses.
Nexus also failed to comply with its statutory duty on consultation and consultees were "misled" by claims that the franchising scheme was superior to operators' alternative partnership proposals

Commenting on the Review Board findings, Stagecoach Group Chief Executive Martin Griffiths said: "We welcome the Review Board's confirmation that the core franchising proposal was unaffordable, inflexible, high risk and not in the public interest.

"Tyne and Wear already has 90% bus customer satisfaction, amongst the highest levels of bus use in the country, and smart ticketing is being introduced across the region. Franchising does nothing to build on that successful, high-quality network.

"Nexus's franchising plans envisaged no more buses, no new routes and no more services. When subjected to proper public scrutiny, it admitted its plan had a close to 1 in 3 chance of financial failure, it had no money to fund the bus network after 10 years and it had made numerous multi-million-pound mistakes in its calculations.

"We would urge the North East Combined Authority to respect the findings of the Review Board, and put passengers and local people first, by abandoning the misguided franchising plans. Instead, we call on them to work in partnership with bus operators to build on Tyne and Wear's excellent bus network and deliver on our joint responsibility to give local people even better bus services."

In addition to its formal findings, the Review Board comments on the government's planned devolution programme and linked potential changes around bus delivery. It says that whatever approach is taken, there are "valuable lessons" to be learned from the examination of the Tyne and Wear scheme.

Stagecoach notes the Board's recommendations include that:
there should be a "staged, independently scrutinised, approach to the process of development and assessment of any proposal", including the use of independent experts, and an "annual scrutiny review" of what any scheme has delivered
"legislation enabling franchising should specifically address the issue of proportionality of financial loss of bus operators". The Board adds that "it may be that some form of compensation is considered appropriate".

Mr Griffiths added: "The only fully worked up proposal for bus franchising in the UK outside of London is in Tyne and Wear. But the independent scrutiny provided by the Review Board has exposed the serious risks to bus passengers and taxpayers from franchising in any part of the country.

"Independent research* suggests it would cost up to an estimated £3.2 billion a year to run a franchising system across England. This would be a tax on the public that would dwarf the cost of the HS2 high speed rail project in less than 20 years. We support the principle of devolution, but it is clear that bus franchising is a one-way ticket to worse services, higher fares and tax rises for local people.

"We believe there are far better models for improving the public transport offer in major cities based on true partnership working between the public and private sectors. This approach should be actively encouraged in the forthcoming Buses Bill. It should address the competition law issues which would assist the delivery of multi-modal ticketing and improved operating standards. At the same time, this would retain innovation and competition in a dynamic market alongside meeting the social and economic requirements of growing city regions.

"We are open to discussing and developing an enhanced partnership based on these principles with NECA or any other authorities which receive devolution powers, sharing risks appropriately between the public and private sectors."

Full report here https://www.gov.uk/government/publications/quality-contract-scheme-qcs-board-report-on-the-proposed-tyne-and-wear-qcs

 

[ChathillMan]

Nexus will throw toys out of the pram now

 

[Bletchleyite]

Does that now bar the scheme, or is it just advisory?

Personally I think one such scheme needs to go ahead, if only for a specified period, in order to prove once and for all if it is workable. There are a lot of theories, but only one way to find out for certain. I certainly see many benefits to a German-style[1] Verbund approach in the UK, even if there are also downsides.

[1] Almost...given that the Verbuende came about as cartels! Another thing I'd like to see tried in a UK city is the complete abolition of any competition regulation on buses to see what the bus companies would come up with if given totally free rein.

 

[TheGrandWazoo]

Nexus will throw toys out of the pram now

Perhaps a modicum of peace might break out and a legally enforced voluntary partnership is the better option?

Gideon's offers on franchising fill me with dread - looks like a hiding to nothing (and indeed, Norman Baker has said much the same). As has been said, it's not something that, once done, can be easily undone.

 

[Tetchytyke]

Not a surprise, given the makeup of that board...

That said, probably the right call, so long as the bus companies (yes, you, Stagecoach) actually decide to work with Nexus instead of against them for a change.

I'm pretty scathing about all three of the big bus operators up here, but I'd hope everyone puts this behind them and actually focuses on building a coherent network again.

 

[robertclark125]

I think it's more a case that Nexus need to work with the bus operators. Stagecoach in particular have been willing to work with Nexus, and indeed work with South Tyneside council. But Nexus don't want to work with the operators, even independents.

I also think that this result perhaps now brings into question the whole future of Nexus, given that Stagecoach and South Tyneside council have their own partnership, one has to wonder if there will be changes to the way that Nexus operates, and it more becomes a publicity vehicle, offering tickets and operating Metro, in the same way that SPT is now, rather than trying to run or subsidise services.

 

[TheGrandWazoo]

Not a surprise, given the makeup of that board...

That said, probably the right call, so long as the bus companies (yes, you, Stagecoach) actually decide to work with Nexus instead of against them for a change.

I'm pretty scathing about all three of the big bus operators up here, but I'd hope everyone puts this behind them and actually focuses on building a coherent network again.

I think the make-up of the board was pretty fair. A traffic commissioner (neutral), an independent consultant (who is a former Local Government bureaucrat - arguably more open to local government control) and a former London bus company MD (arguably more pro to the bus companies).

In terms of the big 3, I know you have firmly entrenched views on Stagecoach but the fleet is pretty decent now. The focus has been on getting rid of the non DDA single decks (Shields and Sunderland) and I'd not be surprised to see a move back to deckers so the mid life deckers in Newcastle will probably head elsewhere - pure speculation mind.

Arriva have really upped their game since the QCS process started. I don't think that (the threat of QCS) has been the impetus as you can see it throughout Arriva North East. The lack of new vehicles in that fleet during 2001-7 created an ageing fleet, unreliability, service cuts and the like; it was like First Group in miniature. They've still got some older fleet but that's a balanced fleet profile for you.

Go Ahead have probably the most curious approach. Some tired old fleet living cheek by jowl with some highly appointed stuff. Really is a mix and match, and the same goes for things like branding etc.

However, those are the surface issues, albeit important. Areas where they need to work in partnership with Nexus are in terms of through ticketing; would argue that's the single biggest area.

Also, whilst Go Ahead have actually shown some level of innovation in the area and developing new markets (especially in areas like North Tyneside e.g. Cobalt), the other two have tended to protect what they have, especially Stagecoach (which is curious given their record elsewhere in the UK).

Perhaps the feeling is that the network is so comprehensive that opportunities to develop are limited? Whilst there's doubtless some truth in that, the fact that GNE have managed to develop new markets would indicate that there is scope and maybe that could also be enshrined in a VPA?

 

[Tetchytyke]

Stagecoach are in stasis in Newcastle, although they have just extended the 22 through to Cobalt, which is an interesting development. In some ways that's no bad thing- the network is consistent and stable, which is their strongpoint- but the Newcastle fleet (even the E400s) are getting very tired. Some things never change- they still scrimp on PVR too much, meaning buses that bunch at 8am are still bunched at 5pm- but the changes to ticketing have been very positive. Having to pay an extra fiver a week from Newburn always felt like being ripped off, so getting rid of that and bringing in smartcards is a good thing.

Arriva are slipping backwards again, rather quickly tbh, the most recent MAX refurbs are 51-plate ex-London buses (silk purses and sows' ears come to mind) and punctuality on the routes into Newcastle is once again shocking.

Go are just muddled, they don't know if they want route branding or not and seem to be recycling ideas (they've just changed one route brand from Winlaton services to Stanley services). The network seems to be constantly changing, they're forever announcing changes in Gateshead, and the changes are mostly about interworking routes to save one or two buses from the PVR. All feels very unnecessary and a far cry from what they were doing under Huntley.

Through ticketing is the issue that really needs fixing though. Transfare seems to be pretty much dead, which is a real shame, and there's a huge price penalty if you need to travel by more than one operator. Though I'd agree the issues with Network One aren't just the bus companies; Metro under DB Regio seems to be increasingly putting itself in a silo.

Whisper it quietly, but I am softening a bit towards Stagecoach now I've come back up north

I don't think the quality contract was ever the right call. I just fear that now the threat has gone we'll see the bus companies very quickly slip back into their old bad habits.

 

[ChathillMan]

Reading Cllr Forbes comments this is clearly about Money

Instead of having another go at bus companies maybe Forbes should ask himself why after plenty of money and years the plan was torn apart on the economics, the one thing they needed to nail.

He should clear house with Nexus. He won't. He will blame the bus companies and play politics.

The battle was there to be won and Nexus, again flunked it

 

[Tetchytyke]

Oh don't even get me started on Nick Forbes. He shut City Pool down for political rather than economic reasons, the only thing he cares about is Nick Forbes. Has more than a whiff of the T Dan Smiths about him in my opinion.

The sooner he's booted out and we get a competent (i.e. not Labour) council back the better.

 

[HSTEd]

And that shows that this nonsense coming out of Tory Party HQ about allowing reregulation of buses in the North was just that... nonsense.
Who exactly appointed this 'independent board'?

 

[ChathillMan]

People that care about this have very polarising opinions about buses. I've taken time to read the summary of the report and its damning to NEXUS.

Here are the killer lines

"Nexus did not consider the substantial difference that exists between the nature of London contracts and that of their own and the consequences for risk and bid pricing. London bus contracts are awarded route by route for five year terms"*

"We saw nobody from Nexus who had had any real commercial responsibilities for bus operation"*

"Some risks are still undefined - the contracts are not finalised and termination and variation risks are completely at large"*

"Who is going to do the service planning? Fiona Bootle indicated that no service planners nor scheduling staff would be transferring from the existing operators"

“The Board was not convinced by aspects of the economic modelling of the benefits of the proposal, and was concerned by changes to the presentation of economic benefits after consultation"

These are damning statements against a publicly funded body wanting to fundamentally change the way buses are operated in the region.

You'll hear statements from NEXUS, Forbes and supporters about bus companies profits being put before passengers and the Northern Powerhouse being a joke, but that is a sideshow for me. LOok at the above and tell me NEXUS are fit to have anything to do with public transport in region.

They've spent years and plenty of money along the way, only to fail.

 

[radamfi]

"We saw nobody from Nexus who had had any real commercial responsibilities for bus operation"*

Surely that's a chicken and egg situation? At the moment, Nexus is only involved in procurement of subsidised bus services so won't currently have someone of that nature. They can't just have someone twiddling their thumbs, waiting for the QC to be approved.

It would appear using the QC route to franchising is a dead end, given that it will always end up being thrown out by the committee as the conditions are clearly too onerous, despite allegedly being made less so in 2008. Better to wait for devolution, like what Greater Manchester has. As part of the deal with the government to impose an elected mayor, that area has been given permission to take control of transport like TfL so it need not pass near-impossible QC-type tests.

 

[Tetchytyke]

"We saw nobody from Nexus who had had any real commercial responsibilities for bus operation"*

"Who is going to do the service planning? Fiona Bootle indicated that no service planners nor scheduling staff would be transferring from the existing operators"

These comments show that it will basically be impossible to instigate a Quality Contract under the current laws. Whether this is intended or not I'll let others decide.

Nexus don't have commercial responsibilities for bus operation, given that commercial responsibilities currently lie with the bus companies and with DB Regio. They can't recruit someone to cover responsibilities that don't exist, and they can't recruit someone on the off-chance they will gain those responsibilities later.

Similarly I'm not sure what "service planners" have to do with anything, given that Nexus are perfectly capable of designing and specifying tendered routes and have been doing so for many years. Whilst "service managers" may not be employed by Nexus now (again, you can't employ people on the off-chance you'll win a QC), they can be recruited.

It is clear that it is impossible to take control of your local buses under a Quality Contract because clearly the Traffic Commissioner believes you need to recruit everyone you need before applying, on the off-chance you'll win. No organisation- public or private- can really ever do that. So devolution is effectively the only way to do it.

ETA: It's fascinating how the panel focus on a VPA being the solution to everything, repeatedly castigating Nexus for not adequately considering it. The panel briefly mention that NEBOA repeatedly refused to offer anything into a VPA until the 11th hour, before offering 50 buses, yet castigate Nexus for not trusting the bus companies. I can't help but think that that panel knew what decision they wanted long before the hearing ever took place...