Speculative : future of the British bus industry

[Simon75]

Within this week :

Yellow Buses (Bournemouth) ceased
Powells/CT plus (West and South Yorkshire, ) ceased
Midland Classic (taken over by Rotala)

Could we see more consolidation/closures within the bus industry?

 

[Surreyman]

Within this week :

Yellow Buses (Bournemouth) ceased
Powells/CT plus (West and South Yorkshire, ) ceased
Midland Classic (taken over by Rotala)

Could we see more consolidation/closures within the bus industry?

Rising costs & falling revenues, staff retention problems, we also hear a lot about 'Zombie' companies, heavily indebted and only able to service their debts due to very low interest rates etc etc, from what I am hearing, Yellow buses may have fallen into that category?
I suspect there is more to come, both closures and sell-offs, a lot will depend on available public funding which will vary from area to area.
The UK bus market has evolved such that in the main, large national companies run the majority of commercial routes and small independents mostly bid for tendered routes, there are exceptions of course.
With Stagecoach & Go Ahead under new ownership, Arriva in 'limbo' waiting for DeutscheBahn to make up its mind and a newly financially revitalised First group, it will be interesting to see how the 'big boys' react - new investment or downsizing & rationalisation.

 

[Joe Paxton]

Andrew Wickham, Managing Director

[...]
I suspect there is more to come, both closures and sell-offs, a lot will depend on available public funding which will vary from area to area.
[...]

Andrew Wickham, Managing Director of Go South Coast (owner of Poole-based Morebus) shares your suspicion. Replying on Twitter to people pondering on the ownership models behind bus services, he replied thus:

twitter.com/AndrewWickhamGo/status/1555088849671528449

It isn’t so simple as that. Publicly owned companies have also failed - Halton Transport, owned by the council failed in 2020 before Covid. Fact is that higher fuel, wages and other costs, and a reduced number of travellers post Covid means that weak operators may not survive…

… I fear there will be more from all types of ownership over the coming months.

The economy is, by all forecasts, set to tank this coming autumn / winter.

 

[overthewater]

Of course were does that leave Arriva? DB has been trying to sell it off for ages and yet its been impossible. Even Stagecoach managed to find two buyer in a shorter space of time.

 

[820KDV]

I think that it is the lack of drivers which is the biggest problem at the moment. Of course the reasons for that could be many and varied, but remuneration and lengths of duties are likely to be among them and without good revenue, companies can't pay better rates, which in turn tends to lead to long shifts (or shifts plus overtime) to bring in a suitable wage.

I work for one of the Local Transport Authorities which didn't get any BSIP funding, but we do have various S106 funds, there are things we'd like to do in the way of promotion of buses (encouraging the concessionary bus pass users back, and weekly themed activities during Catch the Bus Month etc) and we have a Council Leader who is asking what needs to be done to make buses more attractive, with the suggestion that he will make funding available. Exciting times! Or they should be, but our operators are struggling to run what they already have, and many of their truck routes are already running reduced timetables.

We fear for the last route which First run in our area, having once had a large network, as we know no one else is interested in running it - regardless of what we might be able to offer in the way of subsidy. We fear that one of our little operators will decide enough-is-enough, leaving us with 6 workings worth of town bus services to cover, as well as the one he has already given notice on. Again our enquiries have not found anyone interested to take them on.

Bleak times indeed.

 

[E-Rail]

I suspect a Labour run coalition of some sort in 2024 and a form of nationalised bus network after that.

It was always said that when Souter gets out, the game is up. Souter is out.

 

[Joe Paxton]

I suspect a Labour run coalition of some sort in 2024 and a form of nationalised bus network after that.

It was always said that when Souter gets out, the game is up. Souter is out.

How things play out in Greater Manchester under the new franchising arrangements might well inform wider policy. The transition is scheduled to take place between 2023 and 2025 (see under 'Next steps' on this TfGM webpage).

Re Souter - it's widely believed, with I think good reason, that Souter's substantial donations to the SNP meant the party ditched their earlier pledge regarding the re-regulation of bus services.

 

[Cloud Strife]

I suspect a Labour run coalition of some sort in 2024 and a form of nationalised bus network after that.

Maybe not nationalised, but a framework in place establishing something similar to what exists in Germany with the transport associations.

 

[WM Bus]

Discount Travel Solutions, Smethwick have now ceased trading.
Ran on the 11 Outer Circle.

 

[Trnsprt4Sctlnd]

Dire.

 

[Ken H]

Councils are not helping
Leeds are pedestrianising the city centre. long gone are the days of the main shopping street (Briggate) thronging with people shopping and queuing for the trams and later buses. Its pedestrianised so people who find walking difficult or with heavy bags of shopping have to walk through to Vicar Lane.
And now they are removing the bus stops near the railway station. So people completing their journey by bus have a trek across City Square. And they wonder why the city centre is dying. Integration? Ha!
Compare with Harrogate. Nice central bus and rail station and buses passing to the east and the west of the main shopping centre. The place just feels busier
But if bus staff wages are to be raised to be competitive, then a lot more subsidy will be needed. Will people who never use public transport vote for such a subsidy when 'schools and hospitals' need the money more.

 

[The Albion]

Nothing dire regarding the closure of Discount Travel Solutions.

 

[Observer]

Nothing dire regarding the closure of Discount Travel Solutions.

Surprised they were still around as I thought they had expired years ago.

I seem to recall there were a few companies with similar ownership in that area, doing a few odd services per day with old Darts, not really sustainable.

 

[MetalMicky]

There’s a good quote today from Stockport councillor and Greater Manchester Transport Committee member David Meller:
“By not supporting bus routes fully, and effectively asking operators to ‘pick and choose’ the routes they can operate for profit, it not only makes a mockery of this government’s plans to boost buses nationally but, during this cost of living crisis, means people will be forced into cars many are struggling to fill with petrol.”

Can GB learn anything from the funding models and organisation of bus networks in any other European nations? Serious question.

 

[LUYMun]

"It will get worse before it gets better"

 

[johncrossley]

Can GB learn anything from the funding models and organisation of bus networks in any other European nations? Serious question.

There are various funding and organisation models in Europe, and indeed the world. Some use compulsory tendering, some use direct funding to private companies and some have state owned operators. There are even different models used in the British Isles. You have competitive tendering in London and Jersey, state owned buses in the Isle of Man and most of Ireland, including Northern Ireland, some tendering in and around Dublin with some commercial (mostly longer distance) bus routes in the Republic of Ireland.

The main point to take away is that almost all civilised countries heavily subsidise their public transport, regardless of funding model or organisation.

 

[TheManOnThe172]

Is there any way of find details of bus service changes at the point when they are submitted to the Transport Commissioners?

If there are going to be widespread service cuts from 5th October (the day after the final round of Covid support has run out), then I presume that these changes will have to be submitted to the Transport Commissioners six weeks ahead, ie by 24 August. But are those submissions of any help to those wanting the maximum advance notice of changes? (For anyone wanting to publish any new timetable, or at least a note warning of substantial changes if that is indeed the case, in a monthly community publication, even six weeks ahead could be pretty tight).

Looking on the Transport Commissioners site (eg listing here for Hulleys of Baslow), all I can see for previously-submitted changes is a very brief text descriptor. While "Cancellation" of a route is pretty clear, "To amend timetable" could be anything from a minor retiming to a savage thinning-out.

Am I missing a way of finding the detail at the point of submission? And if the detail isn't public at that point, when (and where) does it first become evident? Waiting for a local government Public Transport unit to publish details can result in only discovering changes very close to the day that the service changes.

 

[TheGrandWazoo]

There’s a good quote today from Stockport councillor and Greater Manchester Transport Committee member David Meller:
“By not supporting bus routes fully, and effectively asking operators to ‘pick and choose’ the routes they can operate for profit, it not only makes a mockery of this government’s plans to boost buses nationally but, during this cost of living crisis, means people will be forced into cars many are struggling to fill with petrol.”

Can GB learn anything from the funding models and organisation of bus networks in any other European nations? Serious question.

It's a fair question.

One of the usual questions is why can't the profitable routes' profits be employed to cross-subsidise those routes that are commercially unviable. In the current UK competitive environment, operators are precluded from running services in that manner on the basis of breaking competition law. It is so you can't compete on a route by swamping it with buses by using your profits from other routes. However, it is fair to say that there is a limited amount of low level cross-subsidy in the industry - the retention of that early evening service that might cover its direct operating costs but doesn't bear any of the central overheads is an example of this.

However, extensive cross-subsidy was the model that didn't work during the 1960s/1970s. It began to divert resources and investment from good services to prop up a selection of increasingly unviable basket cases.

The deregulated model was supposed to reduce the cost to the taxpayer whilst competition would make firms raise their game. The first bit happened, the second less so. Of course, there was the concern that unviable services would simply be lost. Therefore, there was to be a safety net in the form of tendered services for local authorities to specify and procure. That, as a concept, worked ok until the coalition government and austerity. Central govt cut the grant to local authorities and also restrict their ability to raise funds from taxation. As bus services are not a statutory requirement (unlike schools) then they were an easy cut.

There is also the view that there is a swathe of duplication of bus services that can be removed. Probably a fair view 20 years ago or more but now, there are few examples of on-road competition; the more usual criticism is that operators have a cosy world of mutually respected boundaries, so this bonfire of duplication isn't really the case.

The fact is that bus services need funding to provide, and the ability to level the playing field a bit with the private car. How that is created and then administered is the tricky bit. I'd sooner see some moves such as removing tax implications on free bus passes but also a means of linking investment to operators with passenger growth.

 

[MetalMicky]

It's a fair question.

One of the usual questions is why can't the profitable routes' profits be employed to cross-subsidise those routes that are commercially unviable. In the current UK competitive environment, operators are precluded from running services in that manner on the basis of breaking competition law. It is so you can't compete on a route by swamping it with buses by using your profits from other routes. However, it is fair to say that there is a limited amount of low level cross-subsidy in the industry - the retention of that early evening service that might cover its direct operating costs but doesn't bear any of the central overheads is an example of this.

However, extensive cross-subsidy was the model that didn't work during the 1960s/1970s. It began to divert resources and investment from good services to prop up a selection of increasingly unviable basket cases.

The deregulated model was supposed to reduce the cost to the taxpayer whilst competition would make firms raise their game. The first bit happened, the second less so. Of course, there was the concern that unviable services would simply be lost. Therefore, there was to be a safety net in the form of tendered services for local authorities to specify and procure. That, as a concept, worked ok until the coalition government and austerity. Central govt cut the grant to local authorities and also restrict their ability to raise funds from taxation. As bus services are not a statutory requirement (unlike schools) then they were an easy cut.

There is also the view that there is a swathe of duplication of bus services that can be removed. Probably a fair view 20 years ago or more but now, there are few examples of on-road competition; the more usual criticism is that operators have a cosy world of mutually respected boundaries, so this bonfire of duplication isn't really the case.

The fact is that bus services need funding to provide, and the ability to level the playing field a bit with the private car. How that is created and then administered is the tricky bit. I'd sooner see some moves such as removing tax implications on free bus passes but also a means of linking investment to operators with passenger growth.

Thank you for your detailed reply. For clarification, how did govt restrict authorities from raising funds from taxation?

There is a story on the BBC news app this week about a public meeting in Yate in South Gloucestershire discussing bus funding where a vote was taken asking the council to levy a small precept on next year’s council tax specifically to save threatened routes. Do you think that approach has any legs?

Nottingham City has its workplace parking levy and Leicester City is planning to do the same to raise funds in absence of BSIP money, but this isn’t an option in counties with small towns which are the very places under the most threat of collapsing networks.

 

[TheGrandWazoo]

Thank you for your detailed reply. For clarification, how did govt restrict authorities from raising funds from taxation?

There is a story on the BBC news app this week about a public meeting in Yate in South Gloucestershire discussing bus funding where a vote was taken asking the council to levy a small precept on next year’s council tax specifically to save threatened routes. Do you think that approach has any legs?

Nottingham City has its workplace parking levy and Leicester City is planning to do the same to raise funds in absence of BSIP money, but this isn’t an option in counties with small towns which are the very places under the most threat of collapsing networks.

For upper and single-tier authorities, council tax increases are capped at 2.99% comprising a 1% social care precept and 1.99% for general council tax.

 

[820KDV]

But will funding provide the answer? In so many places operators are reducing services due to a lack of drivers. I dealt with two such Registration variations, submitted under the short notice procedure, at work today alone.

First West of England, for example, are apparently withdrawing the 126 Wells to Weston-super-Mare service. It seems that the real problem isn't a lack of revenue on the 126, although I'm sure it could be, and has been, better but given the driver shortage they are choosing to re-deploy drivers from the 126 onto the Wells - Bath corridor to release Bath's drivers to work on Bath University services where huge numbers of passengers can be moved. Of course, as a business, First will run where the best money is to be made.

Unless funding can be found to provide a significant pay rise for drivers to attract more in to the industry what hope do the local authorities have in filling the gaps? Just because the LTA puts out a tender there is no compulsion for anyone to bid.

 

[PG]

But will funding provide the answer? In so many places operators are reducing services due to a lack of drivers.

I think you've answered your own question:

Unless funding can be found to provide a significant pay rise for drivers to attract more in to the industry

Either the constituent countries of the UK decide that its worth funding bus services or they get withdrawn. Seeing the mess that the (politically higher profile) railways are in then I fear bus services in all but the biggest cities will cease.

 

[RT4038]

But will funding provide the answer? In so many places operators are reducing services due to a lack of drivers. I dealt with two such Registration variations, submitted under the short notice procedure, at work today alone.

Well yes, because higher funding could mean higher wages for bus drivers and therefore more people would be attracted to the job. So before putting more services on, we've first got to fund the existing ones.

Is there any way of find details of bus service changes at the point when they are submitted to the Transport Commissioners?

If there are going to be widespread service cuts from 5th October (the day after the final round of Covid support has run out), then I presume that these changes will have to be submitted to the Transport Commissioners six weeks ahead, ie by 24 August. But are those submissions of any help to those wanting the maximum advance notice of changes? (For anyone wanting to publish any new timetable, or at least a note warning of substantial changes if that is indeed the case, in a monthly community publication, even six weeks ahead could be pretty tight).

Looking on the Transport Commissioners site (eg listing here for Hulleys of Baslow), all I can see for previously-submitted changes is a very brief text descriptor. While "Cancellation" of a route is pretty clear, "To amend timetable" could be anything from a minor retiming to a savage thinning-out.

Am I missing a way of finding the detail at the point of submission? And if the detail isn't public at that point, when (and where) does it first become evident? Waiting for a local government Public Transport unit to publish details can result in only discovering changes very close to the day that the service changes.

One has to be careful with the submissions to the Traffic Commissioners - operators submit Cancellations or revisions and then LTAs (local transport authorities) make plans to re-instate fully or partially the services - the process of which often eats well into the six week window and results in many 'short notice' applications.

 

[markymark2000]

Is there any way of find details of bus service changes at the point when they are submitted to the Transport Commissioners?

If there are going to be widespread service cuts from 5th October (the day after the final round of Covid support has run out), then I presume that these changes will have to be submitted to the Transport Commissioners six weeks ahead, ie by 24 August. But are those submissions of any help to those wanting the maximum advance notice of changes? (For anyone wanting to publish any new timetable, or at least a note warning of substantial changes if that is indeed the case, in a monthly community publication, even six weeks ahead could be pretty tight).

Looking on the Transport Commissioners site (eg listing here for Hulleys of Baslow), all I can see for previously-submitted changes is a very brief text descriptor. While "Cancellation" of a route is pretty clear, "To amend timetable" could be anything from a minor retiming to a savage thinning-out.

Am I missing a way of finding the detail at the point of submission? And if the detail isn't public at that point, when (and where) does it first become evident? Waiting for a local government Public Transport unit to publish details can result in only discovering changes very close to the day that the service changes.

If you email [email protected], you can request the registrations. You then have to call them at some point and pay £3 for each registration that you want. (The Office of Traffic Commissioners hasn't moved into the 21st century yet with an easy way for people to get the registrations)

First West of England, for example, are apparently withdrawing the 126 Wells to Weston-super-Mare service. It seems that the real problem isn't a lack of revenue on the 126, although I'm sure it could be, and has been, better but given the driver shortage they are choosing to re-deploy drivers from the 126 onto the Wells - Bath corridor to release Bath's drivers to work on Bath University services where huge numbers of passengers can be moved. Of course, as a business, First will run where the best money is to be made.

And here we come to the Commonwealth Games and Chaserider situations. Operators chasing contract revenue and shafting normal passengers. Bath Uni contract could go to somewhere else in few years. Then what will they do as they will have killed the core network by then.

Any operator failing their core network should be forced to pay up compensation to those passengers whom they are letting down. But then again, that is in the hands of the spineless traffic commissioners who point blank refuse to use their powers to punish larger operators to sort their [insert word] out. Infact, the Traffic Commissioners own stats back this up (Traffic Commissioner Annual Report shows that 0 public inquiries were held in relation to local bus services in the 2021-22 year. In 2020-21 there were 2 hearings, 1 had no further action 1 had a warning). Operators know they can run riot with no repercussions and so do so. Until we get some traffic commissioners with a backbone, the industry will be in a bad place as operators do what they want.

Well yes, because higher funding could mean higher wages for bus drivers and therefore more people would be attracted to the job. So before putting more services on, we've first got to fund the existing ones.

Higher wages mean higher fares to cover the costs which means less people travel by bus and therefore less buses needed, less drivers needed. Ooop, jobs gone all because people want really high wages, often with conditions which significantly reduce the amount that they work.

 

[Deerfold]

However, extensive cross-subsidy was the model that didn't work during the 1960s/1970s. It began to divert resources and investment from good services to prop up a selection of increasingly unviable basket cases.

The deregulated model was supposed to reduce the cost to the taxpayer whilst competition would make firms raise their game. The first bit happened, the second less so. Of course, there was the concern that unviable services would simply be lost. Therefore, there was to be a safety net in the form of tendered services for local authorities to specify and procure. That, as a concept, worked ok until the coalition government and austerity. Central govt cut the grant to local authorities and also restrict their ability to raise funds from taxation. As bus services are not a statutory requirement (unlike schools) then they were an easy cut

The deregulated model failed from day 1. Certainly where I was living the council companies were profitable, so the local councils lost their surplus on profitable routes, but still had to pay for loss-making routes they wanted to keep (and to ensure anyone was interested in running them, there needed to be an element of profit in the amount paid).

 

[820KDV]

And here we come to the Commonwealth Games and Chaserider situations. Operators chasing contract revenue and shafting normal passengers. Bath Uni contract could go to somewhere else in few years. Then what will they do as they will have killed the core network by then.

Except the Bath University services are commercial, and the students are as much "normal passengers" as anyone else, although they probably buy high value season tickets rather than travelling just once a week on an ENCTS pass. Then, out of uni term time, the buses turn up on all sorts of "special" work, such as at concerts, air displays and on rail replacement which can be done at no detriment to the "normal passengers". Linking the villages between Wells and Weston is, in comparison, very marginal work, even if it contributes to the overall position. I'm sure First want to do both, but at present they don't have the driver resource to do so and have made a choice based on the best financial result for the business.

The question remains, how will the Local Transport Authorities (LTAs) fill these gaps? If operators tender on the basis of the rates of pay they are currently paying they won't get the drivers they need. If they tender on the basis of paying a better rate on that work and all the rest of their network to attract sufficient drivers to cover both types of work the LTA wouldn't be able to afford it. And arguably, why should they.

In my own area we have a small operator who has given notice on a 1 bus contract. Whilst it will be tendered, initial exploratory discussions with possible operators suggest that no one will bid. They are all short of drivers, but just about holding things together. Add in the complications of the distance from anyone's depot and its not at all attractive. The operator who often mops up these types of contract has just taken on 3 more tendered bus workings in a scheduled tender round, whilst running their main commercial route at a lower frequency than pre-covid. Although passengers are almost back to previous levels, the driver shortage prevents them resuming the old timetable. But again, as a business, is it better to grow and develop a good commercial route which has potential, or do tendered work which is vulnerable (although not at the moment) to loss to someone else next time round? A second generation family business can, perhaps, act with bit more of a social conscience, as the founder once said "there is a limit to how many cruises you can take in a year" than a big corporate with shareholders to answer to, but should they be obliged to do so?

And we haven't considered the "zero-emission on all contracts" policy which our councillors are pushing for!

 

[TheGrandWazoo]

The deregulated model failed from day 1. Certainly where I was living the council companies were profitable, so the local councils lost their surplus on profitable routes, but still had to pay for loss-making routes they wanted to keep (and to ensure anyone was interested in running them, there needed to be an element of profit in the amount paid).

Many were, on the surface, profitable but benefited from all sorts of subsidies, overt or otherwise.

Let's not forget that the model before was also broken.

Bath Uni contract could go to somewhere else in few years.

It's not a contract - they're commercial services.

Higher wages mean higher fares to cover the costs which means less people travel by bus and therefore less buses needed, less drivers needed. Ooop, jobs gone all because people want really high wages, often with conditions which significantly reduce the amount that they work.

Don't what you mean by that, nor what you're proposing to stop wage growth?

 

[Ken H]

The deregulated model failed from day 1. Certainly where I was living the council companies were profitable, so the local councils lost their surplus on profitable routes, but still had to pay for loss-making routes they wanted to keep (and to ensure anyone was interested in running them, there needed to be an element of profit in the amount paid).

They certainly were not. Read Jim Soper's books on Leeds City Transport. Year after year LCT posted deficits and it got far worse when the PTE took over.
Higher wages, increased fuel costs and changing travel patterns decimated urban transport. And of course more car use.

 

[AB93]

Operators chasing contract revenue and shafting normal passengers. Bath Uni contract could go to somewhere else in few years. Then what will they do as they will have killed the core network by then.

Except the Bath University services are commercial, and the students are as much "normal passengers" as anyone else,

Indeed.
It's also worth noting that the idea the 126 is being withdrawn because of the U1 is speculation originating only from this forum.

 

[markymark2000]

Don't what you mean by that, nor what you're proposing to stop wage growth?

If wages rise as significantly as some of the demands from workers, you'll have no passengers left with the spiral I've mentioned above.

Except the Bath University services are commercial, and the students are as much "normal passengers" as anyone else, although they probably buy high value season tickets rather than travelling just once a week on an ENCTS pass. Then, out of uni term time, the buses turn up on all sorts of "special" work, such as at concerts, air displays and on rail replacement which can be done at no detriment to the "normal passengers". Linking the villages between Wells and Weston is, in comparison, very marginal work, even if it contributes to the overall position. I'm sure First want to do both, but at present they don't have the driver resource to do so and have made a choice based on the best financial result for the business.

Do First pay money then for access to the university or some kind of exclusivity contract going on? That is what most unis which are off the main road seem to have. Money gets exchanged one way or another in some kind of partnership.