Green light for bus franchising – but not in North East

A High Court victory for Greater Manchester Combined Authority has given what the city-region’s mayor, Andy Burnham, has hailed as a ‘green light’ for radical bus service reforms in northern England – but only for areas with devolution deals.

Instead of being able to press ahead with bus franchising, which council leaders have wanted since 2014, the North East will still have to settle for a so-called enhanced partnership (EP) with the bus companies.

North East councillors have been wanting to introduce bus franchising, which would give them control over routes and fares, since 2014 but have failed to meet the necessary criteria – first in 2015, in the main because of value-for-money concerns, and now because there is no comprehensive devolution deal for the region.

The National Bus Strategy requires local transport authorities to pursue one of two routes to bus service improvements if they are to access a share of a £3bn fund for enhancing their bus network – though as Dan Jarvis, Mayor of South Yorkshire, writing in The House magazine points out, all but £1.2bn of the £3bn has already been skimmed off, mainly to fund emergency bus support during the Covid pandemic.

One route to the reform required by the government is bus franchising, as is already operating in London and which can now be developed in Greater Manchester following this week’s court ruling. The North East Joint Transport Committee (JTC), the local transport authority (LTA) for the area, was told in June 2021:

‘In a franchising scheme, the LTA determines the details of the services to be provided; where they run, when they run, the standards of the services and the fares charged. Typically bus operators provide their services under contract to the LTA and no other services can operate in the franchised area without the agreement of the franchising authority’.

But it was also told: ‘The automatic power to introduce a bus franchising scheme is currently only available to mayoral combined authorities (MCAs). LTAs (other than MCAs) that wish to pursue franchising would need to seek the approval of the Secretary of State for Transport’.

As the North East is an MCA only north of the Tyne, whereas the JTC covers areas on both sides of the river, the JTC was told that introducing a franchising scheme was not an option open to it in the short term. It is therefore pursuing the second option, an enhanced partnership.

An EP is a negotiated agreement between the LTA and the bus operators giving the LTA some influence over services but not the same level of control.

Under an EP the LTA could limit services on routes considered to be over-provided but not compel the bus companies to use any savings to increase services elsewhere. It could specify the prices of multi-operator tickets but not single-operator tickets.

Andy Burnham, Mayor of Greater Manchester, said: ‘This [the High Court ruling] is truly fantastic news for everyone outside London who wishes to see a return to a bus service that puts people ahead of profit….

‘However’ he added, in a reminder that franchising has costs as well as benefits, ‘in order to deliver a London-style transport system, we need the right funding to do so for our buses and for our Metrolink system so that people have access to the kind of reliable, affordable services that makes public transport an attractive alternative to the car.

“Access to reliable affordable public transport is central to the government’s commitment to levelling up and to our net zero ambitions. We want government to join us in a partnership that uses Greater Manchester as a pilot to allow it to become the first London-style public transport system outside of London, as the government promised in its Levelling Up White Paper, providing a package of both post-Covid and longer-term funding.

“We know that this result is important not just for Greater Manchester, but for other city-regions too, such as Liverpool City Region and South Yorkshire who have both announced that they are taking steps to introduce a franchised bus network. We hope that this judgement… will pave the way for them to progress with their ambitions to bring buses under public control. This ruling is a green light for the north to retake control of its bus and public transport system.’

However, emphasising that bus franchising does not come without a cost, an increase in council tax being introduced in Greater Manchester in April is needed partly to pay for bus franchising, according to the Manchester Evening News.

And as Dan Jarvis writes franchising is no silver bullet. South Yorkshire may have announced that it is ‘taking steps’ to introduce a franchised network, but as Mayor Jarvis says, the assessment of the costs and benefits is no mere formality: ‘It is absolutely right we should rigorously test and clarify franchising’s costs and benefits. It is only on that basis we will be able to decide whether to finally proceed’.

Some idea of the cost of franchising emerged when the North East Combined Authority (NECA), then covering seven councils in Northumberland, Tyne & Wear and Durham, attempted to introduce the idea – then known as a Quality Contract Scheme (QCS) – in 2014-15. An independent panel found that it would cost the bus operators between £85m and £226m, which it considered disproportionate to any public benefits. It thought a voluntary partnership agreement (VPA) – the equivalent of today’s EP – between NECA and the bus operators would be better.

The independent panel’s findings were contested at the time by Nexus, the Tyne and Wear Passenger Transport Executive.

An academic study* last year in the journal Transport Policy found a number of reasons for the failure of the QCS in the North East in 2015, some of which may still be relevant today, including political issues, ideology and personal relationships between the bus operators on one side and Nexus (the Tyne & Wear Passenger Transport Executive) and local politicians on the other.

COMMENT

Reforming and improving the North East’s bus services so that local people can travel easily between home, work, college and leisure facilities is one of the most important tasks facing those wishing to level up the region. While this week’s High Court decision may be ‘fantastic news’ for Greater Manchester, it does not make bus franchising available to the North East as a way of enhancing the network because the area has no comprehensive devolution deal.

Though this website on June 19, 2021, described an Enhanced Partnership as second best to franchising, it is not clear after further study that that is necessarily the case. Anyway, the JTC is now committed to an EP and must press on with it for now if it is to access government funding. Given the complexity and the funding issues, it is likely to be some years before the full benefits of either franchising – even if the difficulties of attempting to take advantage of the Greater Manchester ruling could be overcome – or an EP are felt. Passengers should not expect major improvements soon.

That is no not say, however, that the North East should not seek a devolution deal for the six councils in Northumberland and Tyne & Wear which would make franchising an option in the future. There are many other reasons for seeking such a deal, which are argued for throughout this site.

*Partnership or franchising to improve bus services in two major English urban regions? An institutional analysis. By Hrelja, R; Monios, J; McTigue, C; and Rye, T. Transport Policy. Vol. 114, Dec 2021, pp 59-67.