Franchise By Default?

There’s much to be commended about how the bus industry has gone about it’s business during lockdown. A quite decent skeleton service has been there since day one. But with very few passengers using it – many estimates suggesting usage down around 90% in those early weeks – it is quite clear that a rather hefty amount of subsidy has been required to keep the wheels turning. A near-£400m package agreed at the start of April between Government and the industry was for a three-month period, involving a mix of existing grants that cover fuel consumption rebates and new emergency funding, for which services were expected to cover up to 50% of pre-lockdown service levels.

And by golly they needed it. On my daily strolls, I observed a fair number of buses passing through my village. Barely any passengers were on board. Now further emergency funding to the tune of £254m from mid-May for the next three months will hopefully help to see buses play their part increasingly as the country slowly climbs out of lockdown.

Predicting the future of the bus world is worse than ever. Warm words and promises of lots of extra cash from the recent election campaign had led many of us to believe the bus industry really had a promising future. As environmental concerns rise up the political spectrum and Greta’s message resonates with increasing numbers of people, public transport could be the centre of a better world.

And now this. The stuff of science fiction movies. A real, devastating message. “Don’t use public transport unless absolutely necessary. Use your car”. This, from Government.
Transport Secretary Grant Shapps even admits its an opposite message to what he should be proposing. But the science has spoken. If buses were ever the mode of last resort, they certainly are for the time being. And the longer this goes on, the worse it will be for the bus industry.

Down the road from me, in Worcestershire, local operator Diamond has taken the opportunity to revamp one of it’s poorly performing routes, and withdraw two others. These are your classic Shire County examples. The sort of routes that barely wash their hands commercially. Ten years of austerity has also seen the piggy bank of the local authority shaken empty, when it comes to topping up these marginal services. The locals doth protest, but, as ever, the issue is a far wider one – made all the more difficult by the invisible invader.

What of the future of buses? Not even Mystic Meg can predict for certain, but the industry must be guarded and ready for new challenges. Notwithstanding the social distancing nightmare, the long-term market may be scarred and dammed irreversibly. The issue of home-working may have been heavily accelerated. Even when Covid is over, is the genie out of the bottle that says working from home more and more is the new norm? The virus hasn’t stopped home deliveries – be it food shopping or stuff from Amazon. In fact, a whole new range of people have discovered how easy online food shopping has become. Yes, there may be a delivery charge, but in the same way that the likes of Uber appeared on the scene, folks are increasingly making a mental trade-off in the minds. Twenty minute wait for a bus with heavy shopping bags? Or £5 delivery charge dropped to your front door, no hassle?

So what might buses be used for in the future? I think a framework of services will probably always need to be there, long into the future. People who can’t work from home, people who aren’t pre-disposed to home shopping deliveries, and of course leisure will all require buses to be there. And I think large City-Regions will ride the storm. My concern, as ever, is for rural services, but also increasingly, those oft-marginal Shire county routes that serve mid-sized towns. It also depends on who is running these services. The large groups have large overheads. They have shareholders that require profit levels. Perhaps for these, big City-Regions work in the business plan, with high-frequency operations and enough users to justify investment. Does that model work in smaller towns surrounded by green fields? Or can it work better with smaller operations? Less expectation of profit, fewer overheads. Are they best suited to Independent operators? But where are these small operators? Many have gone to the wall already, and for those who, traditionally have been both coach & bus operators, the coaching industry is facing an even more dire future than their stage carriage sisters.

If society isn’t ready to ditch the bus lock, stock and barrel, is the future based more on local authority control? If the Government money keeps rolling to support these covid-times timetables, then it surely is more and more likely. There is a requirement with the current batch of emergency funding for commercial operators to agree the level with local authorities required, as demand increases following the easing of lockdown. And that, of course, is perfectly reasonable.

However, as lockdown eases and baby steps are taken, who knows how long social distancing will be required. Many are suggesting that we may have to live with covid for a long time. What if a vaccine is never found? Or it takes many years? Jo Bamford, who brought vehicle builder Wrightbus out of administration seems a confident chap. He is calling for £500m of Government funding to help fund the introduction of 3000 hydrogen-fuelled buses. All positive stuff, but he is also aware of the effects of covid on the long-term future of the image of bus travel, suggesting ways in which buses may be redesigned internally, including handrails manufactured from hospital-standard stainless steel, and ventilation systems that extract air rather than recirculate it internally. Some operators are making real efforts to ensure the internal appearance of buses doesn’t look like a war zone, with bits of seat taped off like a murder scene. There’s some real thought going into making it look more appealing to travel by bus.
The future battle will surely be all about wooing passengers back. But with much reduced capacity, and networks propped up with Government cash, where is the commercial attractiveness?

In those aforementioned Shire County and rural areas, is the future possibly franchise by default? Many industry watchers were keeping an eye – pre-covid – on what is happening in Cornwall, where a new authority-led operation including single branding, simpler integrated ticketing and long-term bus service tendering to one operator, with investment in new vehicles is emerging, although plans for completely free bus travel across the summer appear mired in confusion (see Roger French’s blog on the situation here). There is no doubt that the Cornwall operation has attracted funding above and beyond the usual scrimping and struggling experienced by other Shire/rural areas. Many years ago, Gwynedd Council in North Wales attempted a version of this, with buses visibly painted red on the front with “Bws Gwynedd” logos amongst other initiatives. Is covid more likely to bring an area where the current operator decides to throw in the towel completely, leaving an area bus less?

Meanwhile, in Manchester, where Transport for Greater Manchester has the Government piggy bank, some disquiet has emerged regarding what it is telling operators they must do in order to receive the subsidy. No comment as yet from the City’s major bus operators, but Julian Peddle, the Centrebus Director, and a well known and respected figure on the bus industry scene has vented his frustration publicly. He suggests (amongst other issues) that conditions TfGM are imposing on operators equate to them having total control of the network and a fixed sum of money that may or may not be sufficient. Manchester is the scene of a bid by the Mayor Andy Burnham to consider the first franchise system of a major city-region area in the UK for it’s bus network. There appears not (at least publicly) to be similar situations elsewhere but it isn’t on the face of it a good look.

Chris Cheek, the industry analyst, thinks that bus use is unlikely to recover to more than 55-60% of where it was immediately prior to lockdown. He goes on to say that, in the medium term, lifestyle changes and economic issues could keep demand between 18-26%below pre-virus levels.

All of this potentially paints a bleak picture for the future of the bus industry, but, of course, we still know so little about this virus, and how it will act in the coming months and years. Maybe, if we’re looking at long-term Government support for the bus industry, the operators need to get on the front foot and utilise their undoubted commercial nous ahead of what will probably be inevitable calls for the paymasters to call the shots – franchising by default?

Stagecoach appear to be suggesting such ideas (see previous blog Out of the Darkness? ) which involve deep, long-term partnerships with authority partners.
For passengers, long-term, well thought out, well-costed plan can only be a good thing. But it requires the commercial talents of the bus industry to play their full part. Government funding for all sorts of industries since covid emerged has cost the country an unimaginable sum of money. If that has to continue into the mid and even long term, a bus operation dictated by local authorities may well find itself competing for scarce funding with others. Far better surely to have a long-term, fully planned, well costed network that encompasses the commercial talents of the bus industry, and the civic responsibilities of the local authority.

Out of the Darkness?

My last bus journey before lockdown was unspectacular. It was a 57 from the village 2 miles down the road to mine. The only other passenger, an elderly lady, giggled nervously with me and we both wondered what was going to happen. Then, the next day, Boris locked us down and I haven’t caught a bus since. And I’m missing it terribly.

But, seven weeks on, as we seem set to move mouse-like into some sort of slight lifting of the lockdown, I’m not sure if I’m feeling some sort of miniscule relief that the end is beginning to appear in sight, or if I’m feeling very nervous at the thought of taking a bus ride – especially if it’s a busy service.

Like most other industries, Coronavirus has been devastating for buses. The Government has moved with admirable speed to arrange temporary funding to keep a decent framework going throughout lockdown, but it’s what comes next that is arguably even more important.

Before all of this, it seemed like buses were on the cusp of something good. Boris likes them, and Rishi had promised them all sorts of funding. Politicians were talking about buses, and not always in a negative light. The virus might have cruelly whipped the rug from under the inspection pit, but does this unprecedented time give us all a blank piece of paper to try something new?

We all know buses are important, and they will remain so long after Coronavirus has become an unpleasant memory. What is important though, is that the sector comes out fighting.

There are some interesting stats and research emerging from our time in lockdown. Urban Studies reports that over half of people surveyed are not missing their car commute. Can buses capitalise on that? Before we get too excited, Transport Focus also report that around 60% said they would drive more than use public transport once restrictions are relaxed. A similar percentage said they would cycle more than use public transport. Around 40% also expect to work from home more, going forward.

How much of all this is fear of the unknown? Probably a lot, given that social distancing has been drummed into us, military style for the last month. Keeping that up on buses and trains is, on the face of it, going to be extremely challenging. First in Scotland has commented that, whilst demand for it’s services during lockdown had fallen by 85%, going forward it was going to be “unsustainable”, given that social distancing would require more vehicles to provide capacity. I agree. At least in the short-term, once things start to pick up who is going to co-ordinate thousands of businesses in city centre locations so that they don’t all work office hours and recreate the rush hour? And we seriously can’t expect bus drivers to police social distancing regulations. All of this has the potential to dent confidence in bus services.

Stagecoach though, takes a more holistic, long-term view that is both refreshing and potentially exciting, as it appears to challenge the “either/or” argument over deregulated or franchised operations. In Tony Blair-speak, it is a potential “third way”. We’ve seen evidence of Stagecoach’s out of the box thinking in recent times too. Before Covid, it was proposing a profit-sharing scheme for Manchester, in order to challenge the idea of a franchising arrangement there. Is this evidence of some real mature thinking on behalf of the private sector that realises that, perhaps in Manchester particularly, the game was up? This too from the industry giant that ruthlessly set the standard for Thatcher’s deregulation era. Have the descendants of the Souter era gone soft?

Not a bit of it. With the withdrawal from America and UK rail (and seemingly Sheffield Supertram in the not too distant future), Stagecoach is focussed solely back on buses. As the UK’s largest bus operator, it is, perhaps, looking to the long term. Indeed, at least pre-Covid, the UK bus industry big boys were showing an inclination to get ready for the long haul. First effectively reversed their decision to flog their UK bus operation and now seem intent on staying here. National Express has bought it’s last diesel bus and intends to run clean and green for well into the future. Go Ahead has always been a group of consistent high quality, and only Arriva appear to have a question mark over it’s long-term future in the UK.

Given that buses still seem important to the big groups for the foreseeable, it is welcome that the biggest of all – Stagecoach – is looking to the future framework of how buses are operated in this country, and suggests with it’s latest proposals that true partnership is the way forward.

Based on a unique opportunity to emerge from Covid with a clear long-term plan, Stagecoach suggests;
1. A joint operational and investment plan developed by industry and government to ensure a sustainable transition of Britain’s bus networks from the emergency levels of lockdown to more comprehensive links which support the country’s recovery. Measures needed include steps to rebuild confidence in mass transit, a move away from peak-time commuting to spread demand, and investment in transitional support for transport operators as passenger numbers take time to grow;
2. Radical, permanent changes by national and local government to infrastructure and planning. Road and street space should be prioritised for walking, cycling and high capacity public transport over private cars, with a fundamental reallocation of limited space and steps to encourage first and last mile connections. Public mobility hubs rather than private car parking spaces should be requirements for planning new housing developments, offering public transport connectivity, electric charging points and cycling;
3. Wide-ranging measures to deliver on the government’s levelling up agenda for regions outside London, with many hit hard by the economic shock of Covid-19. This includes new place strategies for towns and cities to rethink high streets, promote local spending and create new attractions, as well as leveraging public transport’s capacity to bring shoppers and visitors to regions on a scale that will not damage the environment;
4. Lifestyle changes, particularly around travel, as well as a focus on technology to address the damaging impact of transport emissions. Pollution, already responsible for asthma and lung disease, is now being linked as a contributor to Covid-19 deaths. Many single-user car trips – the transport equivalent of disposable plastic bags – should be replaced by public transport in urban locations;
5. A “grown-up conversation” to re-examine fiscal policy as the government considers how to pay for the coronavirus pandemic and the necessary actions the country has taken. This would include a complete transformation in how transport journeys are taxed. A move to a system where the polluter pays and sustainable behaviours and use of buses, trams and trains, as well as active travel, are rewarded to make these modes more affordable and accessible to all; and
6. Targeted investment in decarbonisation, including sustainable transport and infrastructure, to help restart the economy, put Britain at the forefront of the green revolution and speed up recovery. Maximising the potential of Britain’s world class and world-leading bus manufacturing sector by accelerating government investment in electric bus fleets will deliver a cleaner environment, improved health and cement Britain’s position as a clean-tech leader.

It’s easy for those of a cynical disposition to pick any or all of the above apart. And it is, of course, true that a real partnership between the industry and the public sector relies, bluntly, on the people involved. But what is different about this is that, while of course preserving Stagecoach as a business in the long-term, it looks on a far wider basis at how, once we are out of lockdown, we move forward with issues such as infrastructure, cycling, rethinking High Streets, the environment and fiscal issues. It also cleverly creates an image around how single user car trips should be replaced by public transport in urban locations: “the transport equivalent of disposable plastic bags”.

It’s a start. And perhaps other bus operators need to get behind this sort of thinking, perhaps as part of their revitalised trade body, the Confederation of Passenger Transport.
Before Covid, there were increasing examples of really good bus operations, beyond the usual excellence. Reasons to be optimistic, you might say. And as we eventually emerge from lockdown, buses will be not only as important as ever, but part of the solution to revitalising our poor environment. The country has had to do what it did with the emergency lockdown, but the future requires serious planning, new ideas and new thoughts about how to do everything, given the huge demands hurled at us by Covid. The threat of another era of austerity should spur us to do things differently, to work together to embrace the skills of a vibrant commercial bus industry coupled with a public responsibility to create real, environmentally-friendly ways to get around.

Maybe the bus industry recognises the deregulation model of the last thirty years isn’t the long-term way forward, but the public sector similarly needs to recognise that clunky authority control isn’t best placed as a transport model in 21st century Britain. A responsible mix of the two however…