Sorry but I'm not seeing anyone on this board being particularly dogmatic about deregulation and its retention. The vast majority of people on this board are passionately pro public transport but this is a self selecting quorum; people on a public transport message board being pro public transport is hardly representative of the population. The argument of deregulation vs a regulated environment is a red herring - you can certainly make investment in public transport in a deregulated world as we saw in the 2000s whether that be via travel for particular elements of the population, Kickstart schemes, support for tendered services etc. However, I mentioned to you in 2012 (?) that the cuts to public expenditure were coming and that has come to pass. Of course, the government has done so rather covertly by cutting BSOG (placing the onus onto the farebox) and through cutting the grant to local authorities.
When you look at the patronage of bus services, there was a steady and consistent fall from the mid 1950s through to the 1980s and for a number of reasons such as the arrival of TV reducing evening travel to places like clubs and cinemas, the increasing affluence of the working class, the staff shortages of the 1960s/1970s that meant services were unreliable or cut back. Deregulation was a massive upheaval and yes, that earthquake had a massive impact on ridership. However, there is a clear correlation between the money provided to public transport and ridership - London spends a massive amount on supporting bus services but as TfL's grant is being cut, then services are also being cut and ridership is now falling. It's not the only reason as congestion is massively impacting service speed and reliability and there is the impact of high street footfall as in the rest of the country as shopping habits change.
We are drifting badly from the thread purpose here so in order not to incur the wrath, I'll try to get back onto topic
First or Arriva could potentially sell their bus operations but local authorities simply do not have the available funds to do much for public transport; they don't have enough for their statutory responsibilities rather than the nice to haves because of years of the austerity in funding public services that people believe was essential. So even were it not legally prohibited by the Bus Service Act 2017, they haven't got the funds to purchase First's Manchester operations.