03Powers today and who’s using them
The Government introduced the Bus Services Act 2017 in response to years of petitioning about the challenges that deregulation posed to improving bus services. As well as provisions on data and a tweak of Quality Partnerships into Advanced Quality Partnerships, the Act offers two new tools for places to improve services:
Enhanced partnership schemes (EPSs). Places can develop an EPS — a non-compulsory agreement between willing operators and local transport authorities. It extends what Quality Partnerships can cover (e.g. the colour of buses, frequencies on certain routes, multi-operator ticket pricing) and gives more flexibility on what counts as a contribution from local areas (e.g. car parking charges and enforcement). If bus operators running 75 per cent of local bus services support an EPS, the scheme is compulsory for other bus operators. Authorities also become the traffic commissioner, responsible for the registration of bus services.
Franchising. Franchising, sometimes referred to as local control, gives metro mayors similar powers to the Mayor of London over buses. On-the-road competition ends. Mayors specify the bus service in their area — the routes, fares, frequencies and quality of bus services. This is based on data from operators on ridership and profitability of the existing network. Operators bid to run services in return for a fixed fee paid by the mayor. Fares are set and collected by the mayor. The Bus Service Operators Grant is devolved to mayors. Authorities without mayors can ask the Government for these powers, but mayors do not have to.
Box 3: How mayors are using BSA powers
|Mayoral Combined Authority||Existing arrangements||Current plans|
|Greater Manchester||Mayor approved plans for franchising in March 2021 with phased introduction between 2023 and 2025. Since then implementation target brought forward to 2024.|
|Liverpool City Region||Bus Alliance||Combined Authority identified bus franchising as ‘leading option’ in February 2020.|
|Cambridgeshire and Peterborough||A new mayor was elected in May 2021. Outline business case prepared under previous Mayor.|
|West of England||Voluntary Partnership||New mayor elected in May 2021. An EPS was under consideration in January 2021.|
|West Midlands||Bus Alliance||EPS plan published in October 2020.|
|Tees Valley||Combined Authority is committed to pursuing new partnership arrangements, while monitoring the development of franchising elsewhere.|
|Sheffield City Region||Voluntary Partnership||Mayor to pursue EPS while continuing to ‘explore’ franchising.|
|North of Tyne||Mayoral authority has no automatic franchising powers|
|West Yorkshire Combined Authority||New mayor has indicated she intends to start the franchising process alongside giving notice for an EPS.|
Greater Manchester is poised to become the first city region outside London to operate a fully franchised and locally accountable bus network. This has not happened overnight; according to the devolution agreement signed in 2014 ‘…the Government stands ready to support legislation if Greater Manchester conclude, following consultation they will take forward, that they wish to move to a franchised model of bus service delivery’5. Discussions between the city and central government led to the 2017 Act and then in 2019 a major consultation asked people in the city if they would back the introduction of a franchising system. Following further consultation, in March 2021 Mayor Andy Burnham announced that bus franchising would go ahead with a phased introduction between 2023 and 2025. Following re-election in May, the mayor said he had begun talks with government to complete the roll-out a year early in 2024.
In other cities, there has been a hesitancy to commit to franchising. Taking control of buses presents plenty of challenges including the time and cost of drawing up and consulting on an appropriate scheme. Bus operators may resist changes that could reduce their power and profit margins and mayors must be prepared to square up to legal challenges. The path to franchising has proved difficult – Tyne and Wear’s efforts to introduce a Quality Contract scheme were thwarted in 2015 (although this franchising bid was prepared before the Bus Services Act became law).
For many mayors the biggest block to franchising bus services will be fears of the cost. Transforming the finances of a metropolitan bus network has a price tag – Greater Manchester Combined Authority has calculated that it will cost £134.5m to bring the region’s buses under mayoral control. How will it pay for this? The funding package consists of £78m of earn-back funding provided by central government as part of the devolution deal; £11m already raised by the existing mayoral precept to date; £17.8m of one-off contributions raised by local authorities; and £22.7m of mayoral precept from future years’ budgets.
Bus operators will argue that improvements for passengers can be achieved by partnership working at a fraction of the cost. But GMCA says that before Covid-19 the public sector already invested millions in Greater Manchester’s bus network – from £250m in infrastructure such as bus priority measures, stations and interchange since 2014 to £86.2m every year in subsidised services and concessionary fares. In addition, devolved funding provided operators with £16m every year in fuel duty rebates. The pandemic has served to increase the amounts of public money now supporting bus services.
The cost of franchising therefore needs to be set against the cost of not franchising. Although the 2017 Act has made it easier than at any time since deregulation to introduce franchising the reluctance to commit to such a wholesale change is understandable. However, the 2021 National Bus Strategy for England has changed the landscape significantly by removing one option – that of maintaining the status quo. Doing nothing now risks losing government support, investment and subsidy. Going forward, mayors have a straight choice between an EPS or franchising.