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What if Lothian Buses had been privatised?

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FlybeDash8Q400

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Has the idea of privatisation of Lothian Buses been considered before?
It could have happened under the Thatcher government. Lothian Regional Council lobbied to maintain it as a publicly owned company despite government wishes to sell it off. Had a privatisation gone ahead it would likely now be part of what is First Group.

Instead what happened is, as a result of deregulation, the company was moved to be a standalone PLC, with the council as its ‘shareholder’. This was because the company became commercial and this was how it complied with that.
 

stevenedin

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It could have happened under the Thatcher government. Lothian Regional Council lobbied to maintain it as a publicly owned company despite government wishes to sell it off. Had a privatisation gone ahead it would likely now be part of what is First Group.

Instead what happened is, as a result of deregulation, the company was moved to be a standalone PLC, with the council as its ‘shareholder’. This was because the company became commercial and this was how it complied with that.
I think that they recently got rid of the plc and it’s now just Ltd
 
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Has the idea of privatisation of Lothian Buses been considered before?

It does come up now and again but if the Council seriously proposed it or a government tried to force it through there would be a crowd with pitchforks outside the City Chambers
 

stevenedin

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It changed at the end of 2013.
Time flies :p

It does come up now and again but if the Council seriously proposed it or a government tried to force it through there would be a crowd with pitchforks outside the City Chambers
If it didn’t through, I could see service quality drop. It is publicly owned but run privately. Probably the best of both worlds right now.
 
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Time flies :p


If it didn’t through, I could see service quality drop. It is publicly owned but run privately. Probably the best of both worlds right now.
I've often thought it's the spectre of private ownership that keeps the quality high.
Plus I can't see another single company being allowed to inherit Lothian's monopoly - I suspect we'd see depots being split between several different operators.
 

DunsBus

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I've often thought it's the spectre of private ownership that keeps the quality high.
Plus I can't see another single company being allowed to inherit Lothian's monopoly - I suspect we'd see depots being split between several different operators.
As I recall, when Lothian, or LRT as it was back then, was set up as an operating company back in 1986 it was as a plc rather than a Ltd to safeguard against any possible sell-off. Its then MD, (the now late) Charles Evans was fiercely against any form of private sector involvement and believed that LRT should remain locally-owned, with decisions made by those who knew the company best.
That LB is still in public ownership nearly 40 years on is a tribute to his determination.
 

oldman

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As I recall, when Lothian, or LRT as it was back then, was set up as an operating company back in 1986 it was as a plc rather than a Ltd to safeguard against any possible sell-off. Its then MD, (the now late) Charles Evans was fiercely against any form of private sector involvement and believed that LRT should remain locally-owned, with decisions made by those who knew the company best.
That LB is still in public ownership nearly 40 years on is a tribute to his determination.
A major factor in Lothian staying independent was political. Labour was stronger in mainly industrial Lothian than in Tayside or Grampian with their large rural areas, then often Tory.
 

DunsBus

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A major factor in Lothian staying independent was political. Labour was stronger in mainly industrial Lothian than in Tayside or Grampian with their large rural areas, then often Tory.
Yup, that was the main factor. The Tories on Lothian Regional Council wanted to see LRT privatised but Labour would have none of it.
 
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Thank goodness for that.
On balance yes, it seems to have worked out mostly to the advantage of the travelling public, although there was a compelling political incentive to succeed.
In fact many people believe Edinburgh has a regulated bus system, something I'm sure Lothian would strongly resist.
 

computerSaysNo

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Had a privatisation gone ahead it would likely now be part of what is First Group.
I don't have much experience traveling with Firstbus but from looking at their Glasgow map they seem to very much cherry pick only the most profitable routes, and leave certain times of day and days for the council/SPT to run a subsidised network with completely different routes; this is obviously not very passenger friendly. They also seem to have a lot of routes splitting at one end or buses not running the full route. Maybe this works if most people are journey planning on an app, but on paper it seems to make the network much more complicated than Lothian Buses' which for the most part run simple routes, every day of the week, with all buses running the full route.

Quality of vehicles at time of purchase also seems to be higher at Lothian than I imagined it would have been under First. I'm imagining First would have bought Streetlites instead of the the Volvo 7900H buses. I imagine Streetdecks would have been bought instead of Volvo/Gemini vehicles which, if the build quality was similar, I wouldn't say are any worse, but I'm not sure if First would have specified charging and Passenger Information systems as Lothian did.

I think First would likely have used more route branding than Lothian did, but with more flexible vehicle/route allocations so the branding wouldn't have been very effective, as per Glasgow.

I think it's likely Edinburgh would still have vehicles from 2008 and a substantial number from 2009 and 2010 running if the network had been ran by First.
 

Grumpyscot

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If the government wants to see how best to run a local bus company, then they should follow Lothian Bus' example - it's why they're voted among the top players in the UK.
 

317 forever

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I've often thought it's the spectre of private ownership that keeps the quality high.
Plus I can't see another single company being allowed to inherit Lothian's monopoly - I suspect we'd see depots being split between several different operators.
I think it would be available for a single purchaser if it is an operator not currently in the area - such as Go-Ahead or Transdev.
 

VioletEclipse

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Let’s pray it never happens.
Lothian has over a century of history and a large reputation, however similar could have been said for Leasks of Lerwick, or EYMS in England some years back. It's unlikely to become an actual threat, but it's not like it could never happen. Am hopeful that if there's ever a genuine risk of it happening then there will be enough public protest to stop it.
 

GusB

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It could have happened under the Thatcher government. Lothian Regional Council lobbied to maintain it as a publicly owned company despite government wishes to sell it off. Had a privatisation gone ahead it would likely now be part of what is First Group.
It could also have happened under the subsequent Major government; Grampian was privatised under Thatcher, but Strathclyde and Tayside were sold off under Major's tenure. Eastern Scottish was sold in 1990 and had a much bigger presence in Edinburgh than it does now, so I'm not convinced that it would have been part of First; it would largely have depended on which entity was sold first. Bear in mind that the then Monopolies and Mergers Commission would have been keeping a close eye on the situation.

Had Lothian been sold off earlier, and dependent on whether it was sold to a management/employee buyout it may well have provided the foundation for the "LRT Group". It could have been sold to one of the existing groups, such as Drawlane or Stagecoach. Either way, it would likely have been precluded from bidding for SMT; likewise, had SMT been sold first, I doubt that its owner would have been allowed to bid for Lothian.

Either way, the current situation would look very different!

This is purely from memory and I can't readily provide a source (it was probably Buses magazine and it's likely still in a box under the stairs), but I'm sure that I can recall some murmurs about Stagecoach taking an interest. I only remember this because I mentioned it to my other half at the time and he recoiled in horror at the thought of Stagecoach stripes replacing Lothian's livery!

I've often thought it's the spectre of private ownership that keeps the quality high.
Plus I can't see another single company being allowed to inherit Lothian's monopoly - I suspect we'd see depots being split between several different operators.
Maybe not now, but when the sell-offs were taking place, Lothian had healthy competition from Eastern/SMT and, to a lesser extent, Edinburgh Transport.
 

LBObserver

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Like you from memory, but a different company, I have a recollection from somewhere of Arriva sniffing around. I think it was to do with Council contracts but that led to some speculation (Edinburgh Evening News probably) of them running an offshoot of Scotland West. That then expanded to an assumption of the councils selling the whole business to Arriva. Take that forward and we could have McGills running the show here. No £2 flat fares.
 
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Like you from memory, but a different company, I have a recollection from somewhere of Arriva sniffing around. I think it was to do with Council contracts but that led to some speculation (Edinburgh Evening News probably) of them running an offshoot of Scotland West. That then expanded to an assumption of the councils selling the whole business to Arriva. Take that forward and we could have McGills running the show here. No £2 flat fares.
Think I found some correspondence dating from the Lothian Region days (possibly mid-1990s) stating that Arriva submitted bids to operate Christmas & New Year services. Then suddenly LRT offered to run them for nothing. Since that time the festive season routes in Edinburgh have operated commercially.
I could be wrong about details and maybe just coincidence. But it seemed either the council laid it on the line to LRT or the company became spooked at that point. The business model shifted towards delivering a comprehensive network across the core area rather than cherry-picking.
 

Baileygirl

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Think I found some correspondence dating from the Lothian Region days (possibly mid-1990s) stating that Arriva submitted bids to operate Christmas & New Year services. Then suddenly LRT offered to run them for nothing. Since that time the festive season routes in Edinburgh have operated commercially.
I could be wrong about details and maybe just coincidence. But it seemed either the council laid it on the line to LRT or the company became spooked at that point. The business model shifted towards delivering a comprehensive network across the core area rather than cherry-picking.
You are correct, but they won the evening services as well, many from Eastern Scottish. Arriva withdrew before they were started. but by coincidence, Lothian had alresdy changed their bid to run them free. A bit back handing going on in the council.
 

DunsBus

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You are correct, but they won the evening services as well, many from Eastern Scottish. Arriva withdrew before they were started. but by coincidence, Lothian had alresdy changed their bid to run them free. A bit back handing going on in the council.
Memory recalls that this brought about the end of Charles Evans' tenure as MD, though he was coming up for retirement age anyway. When Neil Renilson took over as MD, he brought in his own team - mostly ex-Stagecoach - which saw the departure of the rest of the Lothian "old guard".
 

DGP

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There were mention earlier in this thread about First in Glasgow "cherry picking" services with (I think!) an implication that Lothian don't. But I don't think it can be that simple. As far as I know, Operators are obliged to make a profit on every service that they provide and cannot run any at a loss - that would allow big operators with big pockets the opportunity to drive smaller operators off the road and that would be against competition rules. However some of the big national operators require each and every service to make a specific return or they pack off their buses to another part of the country where that return could be achieved whilst the geographically-limited operators may be a bit nuanced in how much profit they are happy with on a route-by-route basis and, in my opinion, tend to put that extra effort into every service and into the overall local network to ensure that happens.
 

Bletchleyite

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Operators are obliged to make a profit on every service that they provide and cannot run any at a loss

This isn't true. They do need to avoid behaving anticompetitively e.g. doing so in a manner likely to harm a competitor unfairly, but they don't have to ensure that every single journey is profitable in and of itself, indeed sometimes it makes sense to provide a less profitable journey to widen the appeal of a service or to grow a new service to profitability.
 

computerSaysNo

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There were mention earlier in this thread about First in Glasgow "cherry picking" services with (I think!) an implication that Lothian don't. But I don't think it can be that simple. As far as I know, Operators are obliged to make a profit on every service that they provide and cannot run any at a loss
I think you're referring to my post and yes, even Lothian will cherry pick, but I imagine to a much smaller extent. I'm thinking about routes like the 12, 36, 38, 45, and daytime 15 - would these have been provided voluntarily by a commercial operator? I'm not sure. Monday to Friday daytime and peak, maybe. Evenings and Sundays? I'd think probably not.

And the bit about running at a loss - there are a lot of ways I can think of to change the monetary figure each route makes, and I'm not even an accountant. Are you including drivers' wages in the figure? Fuel? What about maintenance and replacement parts for the vehicles, which might also operate busier routes?
big operators with big pockets the opportunity to drive smaller operators off the road and that would be against competition rules.
Isn't that exactly what the bigger operators do though? From what other people have said, that is what McGill's did in the West to get rid of the smaller operators.
That also sounds very much what Flixbus is trying to do - saturate the market with lots of buses and cheap fares, wait until the current operators can't sustain their services any more and withdraw, and then put the fares up.
 

EMU303

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When comparing Edinburgh to Glasgow, Lothian Buses benefit from a greater city population density compared to Glasgow due to the 1960s significant destruction of many Glasgow tenement districts to accommodate the M8 motorway (and replace some very poor quality housing) and the collapse of traditional industries.

Plus Glasgow has the largest suburban railway in the UK outside of London, many stations just 2-3 minutes apart, almost entirely on electrified lines. Add the Subway, although just 15 stations it carries around 13 million passengers a year.

So I think Lothian Buses has been operating buses in a more stable/lucrative market compared to Glasgow and they have leveraged that very professionally to maintain and develop a very impressive standard of service.
 

Numpt33

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A major factor in Lothian staying independent was political. Labour was stronger in mainly industrial Lothian than in Tayside or Grampian with their large rural areas, then often Tory.
LRT was able to survive because it never ran at a loss. The Edinburgh Corporation and it's successor; Lothian region never put money into keeping it running. Lots of councils paid for rural and school services out of profitable routes' surpluses.

LRT was formerly a Public Service Department, like a library, or Roads department, governed by the completely different rules that run the public sector. In 1986 it was incorporated under companies law as required by the 1985 Act. City councils still actually owned their companies, but the PTE buses had a different arrangement which was how Westminster/HMG could get its oar in.

Contrast LRT with Portsmouth Citybus which ran at a loss. It continued to run loss making routes at its own expense and lost patronage on its profitable routes. It moved too slowly to survive deregulation so it collapsed and had to be sold off as the Council was barred from bailing it out. I think this was the story in many municipal departments, about 1 in eight.

LRT did a few naughty things in the 80s, like shortening their routes where they lost a bit of money. The council then opened a tender and - oh look, LRTs bid is cheapest! And got paid a small subsidy for those sections. LRT was also shrewd in buying up genuine threats to profit margins and making the ridacard, which meant passengers would actually wait for SMT buses to go past as their fare was paid for. LRT made it through the great filter and is now successful in spite of the council, not because of it.

The other thing differentiating Edinburgh from most cities of its size is the relative lack of urban redevelopment, and incredibly expensive parking - all makes the fare look very reasonable compared to driving.

I think what would have happened if LRT was privatised is that LRT would be another Brighton & Hove, or Trent Barton type story - one of the successes. The geography of Edinburgh is just too good for buses to do badly.
 
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DunsBus

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LRT was able to survive because it never ran at a loss. The Edinburgh Corporation and it's successor; Lothian region never put money into keeping it running. Lots of councils paid for rural and school services out of profitable routes' surpluses.

LRT was formerly a Public Service Department, like a library, or Roads department, governed by the completely different rules that run the public sector. In 1986 it was incorporated under companies law as required by law. City councils actually owned their companies, but the PTE buses had some special arrangement for Westminster to get its oar in.

Unlike Portsmouth Citybus which ran at a loss, and it moved too slowly to survive deregulation so it collapsed and had to be bought out. I think this was the story in many municipal departments.

LRT did a few naughty things in the 80s, like shortening their routes where they lost a bit of money. The council then opened a tender and - oh look, LRTs bid is cheapest! And got paid a small subsidy for those sections. LRT was also shrewd in buying up genuine threats to profit margins and making the ridacard, which meant passengers would actually wait for SMT buses to go past as their fare was paid for. LRT made it through the great filter and is now successful in spite of the council, not because of it.

The other thing differentiating Edinburgh from most cities of its size is the relative lack of urban redevelopment, and incredibly expensive parking - all makes the fare look very reasonable compared to driving.
Another thing which can get added is that LRT changed its Ridacard from zonal to network-wide shortly after deregulation and set up a number of sales agents both within the city and in areas which it now served, thus saving a trip to either 14 Queen Street or Waverley Bridge to have the card renewed on expiry.

I also recall that LRT had the same fare to/from Edinburgh and Tranent regardless of service number. The 26/A and 86 had four fare stages more than the direct service 85, so the 85's fare scale applied at all times.
 

317 forever

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What we must be thankful for is that Lothian Buses was not sold to Badgerline just as GRT were snapping up former Scottish Bus Group companies in the area. Once FirstBus has so much of the area to themselves it could have affected much service quality in Edinburgh. Also, there may have been some enforced divestments by the Office of Fair Trading or Monopolies & Mergers Commission, leading to a fragmentation of operations in the area.
 
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