Deregulation and ownership of buses

[greenline712]

mods note - split from this thread

The deregulation of bus services (Transport Act 1985) was predicated on bus companies determining what routes / journeys were commercially viable, and operating same without subsidy.
In many cases, companies would often pick up journeys at the margins (a 1900 trip on an otherwise commercial service, for example, where a "network benefit" was perceived).

Other journeys / routes that were deemed socially necessary (but not commercially viable) would be supported financially by the relevent Local Transport Authority (usually the County Council).

This actually worked very well in very many cases until the financial strictures of the 2010s, when LTAs found they were unable to finance what they wished to support. It should be noted that some bus companies tried to pick up these lost routes / journeys, but eventually found that there was insufficient passengers travelling, and they were withdrawn.

Simply blaming "deregulation" and "profit-scamming" bus companies does the industry no favours .... for around 25 years the structure actually worked very well. If the changes to the funding of ENCTS passes and reductions in central Government funding of local councils hadn't happened, then the status quo might well have continued.

 

[aron2smith]

The deregulation of bus services (Transport Act 1985) was predicated on bus companies determining what routes / journeys were commercially viable, and operating same without subsidy.
In many cases, companies would often pick up journeys at the margins (a 1900 trip on an otherwise commercial service, for example, where a "network benefit" was perceived).

Other journeys / routes that were deemed socially necessary (but not commercially viable) would be supported financially by the relevent Local Transport Authority (usually the County Council).

This actually worked very well in very many cases until the financial strictures of the 2010s, when LTAs found they were unable to finance what they wished to support. It should be noted that some bus companies tried to pick up these lost routes / journeys, but eventually found that there was insufficient passengers travelling, and they were withdrawn.

Simply blaming "deregulation" and "profit-scamming" bus companies does the industry no favours .... for around 25 years the structure actually worked very well. If the changes to the funding of ENCTS passes and reductions in central Government funding of local councils hadn't happened, then the status quo might well have continued.

Doesn't matter if it worked well for a while, both deregulation and austerity were really disruptive to many areas that got no say on it whatsoever. The cuts in my area were severe, they removed the only direct route to the main rail station and decimated the evening and weekend services which severely limits so many aspects of life. Buses may look quiet but if only one bus fail to show now which seems like all the time with the 251 tbh, the next one is full and standing, especially but not just in rush hour! That is not a way to run the service, especially if we want passenger numbers and modal share to increase. Before my time, but I envy the London Transport and London Country routes that once existed!

Public transport is simply too important to leave to the market and the 1986 to 2016 status quo may have worked but it was never going to last forever and really made no sense that councils had to pay private companies to run buses at quieter times when the lot used to be run together as one system, one network by the council/ transport authority. The places that either franchised or were lucky enough to keep municipal ownership came out of the 2010s stronger than everyone else.

The fact that Central Connect was willing to run only 6 journeys on Saturdays and nothing on Sundays, but with Stansted's funding it can now run the current full timetable of 17 journeys/ day, says it all really. Even if it only carries small numbers, every journey matters. Growing up in London and now living just outside, the contrast couldn't be more stark and frankly we deserve much better as passengers! I don't actually care who runs my bus but I want it to be reliable and run at any time of day that lets me fully participate with activities in my local area and region, the current services don't let me do it and that's to the detriment of my social life, the bus company and the local economy.

 

[Robertj21a]

Doesn't matter if it worked well for a while, both deregulation and austerity were really disruptive to many areas that got no say on it whatsoever. The cuts in my area were severe, they removed the only direct route to the main rail station and decimated the evening and weekend services which severely limits so many aspects of life. Buses may look quiet but if only one bus fail to show now which seems like all the time with the 251 tbh, the next one is full and standing, especially but not just in rush hour! That is not a way to run the service, especially if we want passenger numbers and modal share to increase. Before my time, but I envy the London Transport and London Country routes that once existed!

Public transport is simply too important to leave to the market and the 1986 to 2016 status quo may have worked but it was never going to last forever and really made no sense that councils had to pay private companies to run buses at quieter times when the lot used to be run together as one system, one network by the council/ transport authority. The places that either franchised or were lucky enough to keep municipal ownership came out of the 2010s stronger than everyone else.

The fact that Central Connect was willing to run only 6 journeys on Saturdays and nothing on Sundays, but with Stansted's funding it can now run the current full timetable of 17 journeys/ day, says it all really. Even if it only carries small numbers, every journey matters. Growing up in London and now living just outside, the contrast couldn't be more stark and frankly we deserve much better as passengers! I don't actually care who runs my bus but I want it to be reliable and run at any time of day that lets me fully participate with activities in my local area and region, the current services don't let me do it and that's to the detriment of my social life, the bus company and the local economy.

Are you saying that you are also prepared to pay good prices for this better service?
If you've spent a lot of time using the pretty cheap TfL buses you may well have a rather skewed view on bus fares.

 

[TUC]

In Teesside deregulation led to a 60% reduction in subsidy costs, for a similar sized network. Every part of the country now adopting different models costs more. Why should we want such a poor use of money?

 

[Dwarfer1979]

Buses have to be funded someway, the issue is that the UK has long decided that it doesn't value its bus service to properly fund it through taxes (at least outside London). If you don't have solid and long term funding then private businesses will be better able to run more efficiently and so keep more running for the same amount of limited government funding. Private operators are normally, I suspect we can all think of at least 1 big group who fail here, better at remaining fleet of foot to react to changing circumstances, finding efficient ways of covering work and of marketing what they have got in an attractive way - particularly if you have a good mix of large, medium and small operators in an area.

As others have said, the issue we have run into is that government funding has become even more tight which has coincided with government placing more restrictions and costs on operators (whether you think they are a good thing or not, emission requirements & disability access regs make buses more expensive to buy and run, Open Data & on-board announcements make it more difficult & expensive to run a bus service etc) whilst cutting or controlling income to operators (reducing the fuel duty rebate & concessionary fares where operators now have limited control over how much income they get from a major passenger group) make it harder for operators to provide a comprehensive network. This has particularly undermined the operator mix, it is harder and more expensive to start a new operator than it has ever been (acceptable buses cost more and with concessionary fares you need to be able to operate with little income for up to 6 months before payments kick in) and the pressures on smaller operators is pushing many out. This unfortunately has left us a little too reliant on a single big operator in too many areas and whilst they may be able to deliver the high volume core network they have always been poorly positioned to be the best caretakers for marginal & secondary routes where smaller operators often provided better solutions but there are just fewer of them than there used to be so combined with councils reducing what they can/will fund many of these services have faded away or been reduced to the minimum service level for those with no choice but not a level that will attract discretionary customers.

Until government at any level indicates they are able & willing to put significant funding into bus services it is probably better if they limit their involvement as in my experience councils/government are not good at making decisions like this quickly and there are more worthy destinations for that money (social care) which mean that buses will always be left fighting for scraps just with more scraps taken up with inefficiencies of extra layers of management between councils & operators to manage contracts etc. Without some government funding somewhere in the cycle you will never get a good comprehensive network and at the moment there doesn't appear to be a major party in the UK to commit to even enough to fund a commercial system properly let alone a more comprehensive heavily subsidised system across the country.

 

[mattb7tl]

In Teesside deregulation led to a 60% reduction in subsidy costs, for a similar sized network. Every part of the country now adopting different models costs more. Why should we want such a poor use of money?

Except it doesn't cost more.
If you're refering to the bee network it is a 1/3rd cheaper to operate per KM... The 200 million figure is also the same figure it cost to run the private network when inflation adjusted and assuming you have no added costs since the pandemic, it also includes the maintenance of the metrolink, fare reimbursements, bus stops, bus stations (new high quality one recently opened so that's an extra cost) If you put the cost of that over all the profits of all the private bus companies in the deregulated era it would also be unprofitable. The only thing that has changed financially is that the majority of cost, cash flow, and income are all in one singular place. It was always unprofitable just split apart and there is no significant increase in costs.
A lot of the smear articles on the network are made by management from McGills, the same company which exploits the taxpayer by having singles more expensive than day tickets as the NEC scheme is based on a % of a single manipulating the concessionary fare reimbursement scheme which is taxpayer money.
Franchising is an expensive transition but not an expensive on going cost which is most important.

 

[TUC]

Except it doesn't cost more.
If you're refering to the bee network it is a 1/3rd cheaper to operate per KM... The 200 million figure is also the same figure it cost to run the private network when inflation adjusted and assuming you have no added costs since the pandemic, it also includes the maintenance of the metrolink, fare reimbursements, bus stops, bus stations (new high quality one recently opened so that's an extra cost) If you put the cost of that over all the profits of all the private bus companies in the deregulated era it would also be unprofitable. The only thing that has changed financially is that the majority of cost, cash flow, and income are all in one singular place. It was always unprofitable just split apart and there is no significant increase in costs.
A lot of the smear articles on the network are made by management from McGills, the same company which exploits the taxpayer by having singles more expensive than day tickets as the NEC scheme is based on a % of a single manipulating the concessionary fare reimbursement scheme which is taxpayer money.
Franchising is an expensive transition but not an expensive on going cost which is most important.

I'm referring to West Yorkshire where, if I remember correctly, the Combined Authority's own figures showed that the new system would cost over £11m more than existing arrangements.

 

[mattb7tl]

I'm referring to West Yorkshire where, if I remember correctly, the Combined Authority's own figures showed that the new system would cost over £11m more than existing arrangements.

Also true
WYCA has one of the most ambitious plans to improve buses out of all the major regions within the UK. The cost for WYCA is going to increase substantially no matter the system because of the ambitions. They simply want to spend more on their buses. TfGM was far less ambitious and had more of a focus on integrating their many different forms of transport, filling gaps, and extending hours of operation. This is overall cheaper and will not add much of a cost to the previous existing network which makes it a good comparison.
The same document you reference from WYCA shows that an EP+ would be more expensive long term and provide less economic benefits but has a bonus of being quicker and cheaper short term while franchising is the opposite. One system represents privatisation, one represents public control. If they are going to spend more the people who are more educated than any of us (also third party) say they are better off facing the large transition costs and going for franchising to get the most value and lower on going costs in the future.

 

[Man of Kent]

Except it doesn't cost more.
If you're refering to the bee network it is a 1/3rd cheaper to operate per KM... The 200 million figure is also the same figure it cost to run the private network when inflation adjusted and assuming you have no added costs since the pandemic, it also includes the maintenance of the metrolink, fare reimbursements, bus stops, bus stations (new high quality one recently opened so that's an extra cost)

TfGM's own figures show it costs a lot more than the previous arrangements. The net cost of providing the bus network is now £226m. Previously tendered services and concessionary fare reimbursement came to around £100m. And the figure for all the items you have listed above is budgeted at £344m for 2025-26.

I am told that the "1/3rd cheaper per km" figure comes from comparing the price of a tendered service with that for a busy commercial operation.

 

[Stan Drews]

TfGM's own figures show it costs a lot more than the previous arrangements. The net cost of providing the bus network is now £226m. Previously tendered services and concessionary fare reimbursement came to around £100m. And the figure for all the items you have listed above is budgeted at £344m for 2025-26.

I am told that the "1/3rd cheaper per km" figure comes from comparing the price of a tendered service with that for a busy commercial operation.

Indeed. Not a chance that buses are costing 1/3 less to run under TfGM than they were before. I think that is just a classic ‘smoke and mirrors’ play with statistics that can be made to support just about any agenda, if you try hard enough.

 

[TheGrandWazoo]

Indeed. Not a chance that buses are costing 1/3 less to run under TfGM than they were before. I think that is just a classic ‘smoke and mirrors’ play with statistics that can be made to support just about any agenda, if you try hard enough.

It doesn't take much to highlight that the 1/3 figure is clearly misleading.

The fuel costs the same, the driver costs the same, the maintenance the same... aside from some back office (?), the actual running costs are the same. The operators before weren't making 33% profit before and, whisper it, they are still making a profit now. Except Metroline probably!

 

[Cesarcollie]

Except it doesn't cost more.
If you're refering to the bee network it is a 1/3rd cheaper to operate per KM... The 200 million figure is also the same figure it cost to run the private network when inflation adjusted and assuming you have no added costs since the pandemic, it also includes the maintenance of the metrolink, fare reimbursements, bus stops, bus stations (new high quality one recently opened so that's an extra cost) If you put the cost of that over all the profits of all the private bus companies in the deregulated era it would also be unprofitable. The only thing that has changed financially is that the majority of cost, cash flow, and income are all in one singular place. It was always unprofitable just split apart and there is no significant increase in costs.
A lot of the smear articles on the network are made by management from McGills, the same company which exploits the taxpayer by having singles more expensive than day tickets as the NEC scheme is based on a % of a single manipulating the concessionary fare reimbursement scheme which is taxpayer money.
Franchising is an expensive transition but not an expensive on going cost which is most important.

1/3 per km cheaper to operate…..than what?

 

[mattb7tl]

TfGM's own figures show it costs a lot more than the previous arrangements. The net cost of providing the bus network is now £226m. Previously tendered services and concessionary fare reimbursement came to around £100m. And the figure for all the items you have listed above is budgeted at £344m for 2025-26.

I am told that the "1/3rd cheaper per km" figure comes from comparing the price of a tendered service with that for a busy commercial operation.

In 2022/23, before franchising related costs were included, TfGM’s accounts show overall expenditure at £184 million. Adjusted for inflation, that becomes approximately £205 million. However, that assumes an unrealistic scenario: that under continued deregulation, operators would have required no additional financial support and that infrastructure, staffing, and tram-related costs would remain static despite all evidence to the contrary.

Additionally, there's now a £6 million rise in bus station costs, pushing the adjusted total to around £211 million. This is a conservative baseline, and even modest increases in support for struggling services, or service improvements would close much of the gap between this and the £226 million cost of franchising. It’s also important to note that under franchising, funding is now centralised. TfGM directly receives grant funding that would previously have gone to operators (also millions) so the £226 million isn't an apples to apples increase, but a reflection of having all the costs and funding in one place rather than scattered across public and private sources.

 

[Man of Kent]

TfGM directly receives grant funding that would previously have gone to operators (also millions).

If that is a reference to Bus Service Operators Grant, that was devolved to TfGM in 2017. If it isn't, what grant funding is it?