(20 Aug 2023, 9:30 am)RobinHood wrote I suspect almost every bus operator in the country would take this now, rather than impose legal fights as per historic opportunities.
The guaranteed income from franchising, completely removing the risk from the commercial operation, I can only see as an attractive proposition for any of the major companies at this time, with the added opportunities for the littler ones of course.
That said, average person has literally no idea (or a completely misguided idea) of the actual costs to operate buses nowadays, and this includes local authorities and Metro Mayors. I estimate that it could be around £165,000 per year that is required to be generated in revenue, per bus, before any profit is being made at all (in an average size, large operator depot).
Those who dream or expect a return to 1985, with buses running everywhere again, will probably be disappointed, as I cannot see how it can be afforded. Once upon a time, there probably were bus networks that harbored massively profitable routes and had the ability to cross subsidise high numbers of unprofitable services if they were ran no-for-profit (which meant only low subsidy from the public purse needed to maintain stability or improve), but frankly I suspect that as we stand today, most operators are either still loss making or reliant on BRG funding still, just to tread water overall.
As a result of the assumptions above, I fear that franchising will cost significantly more than people realise to just provide the same level of service we have today, nevermind improvements. Anything above the current provision, such as more early, late and weekend services, and/or cheaper fares, will consistently require millions (or billions) from the public purse to achieve it. Its simply not sustainable unless we all pay for it via income tax or even a new 'transport tax' for those in franchised areas.
At the end of the day, the bus operator risk is much lower in this situation than it was 10 years ago and will most likely jump at a fixed margin position in the current climate. They will bid at prices that work for them (which may be massive double digit % margins), as there wont be a shortage of work compared to operators available. Operators who put in those high margin prices will still likely 'win' enough work to ensure they can utilise their resources in full, due to the lack of suppliers in comparison to the opportunity requirement. I cannot see that changing and the only loser is the person who needs to pay for it.
I'd say there also seems to be a misguided idea within the bus industry, that the public sector just can't deliver a publicly ran transport network. Please don't get me wrong, as I'm not referring to your post, but quite often I read industry managers or commentators, spending more time talking down the ability of the public sector, than they've ever spent trying to work in partnership with them.
Every business has operating costs, and I'm sure the people who understand them and can do the numbers on them, aren't unique to working for bus operators. Public money comes under a lot more scrutiny than any private company will ever have, and it's why the numbers have to be right.
I don't think people see franchising or public ownership of transport as a return to 1985. Maybe that is reserved to some enthusiast groups, but when speaking to the public about this, it's always extremely popular because they feel that the private sector has
failed them. This is important, because it's not a case of someone waving money at the public in hope of a bit, it's people who are utterly desperate for a solution. I don't think anyone is under the illusion that this is going to be an instant and easy fix, with a return to the masses of routes we had back in the 1980s, but the network by large needs a complete overhaul. Having one transport network of Buses, Metro and Heavy Rail will be key to that; a network of modes that compliment each other.
I completely agree on cross-subsidy, and I think that'll be difficult in the short term at least, but at least we'd be in a position where we are cross-subsidising services, rather than openly admitting that one village can't have a bus, as it impacts the profit margin on another service. That attitude has been one of the biggest issues since deregulation.
Like other public services, there's no denying that the delivery of this will require a lot of public funding, but as with rail, the policy is extremely popular with the electorate nationally. We shouldn't shy away from infrastructure funding, just because it's going to cost public money. The devolution deal opens up close to £1bn in ringfenced Transport funding in the first 5 years, with settlements beyond that for the life of the deal. In terms of contributions though, Tyne and Wear of course already pay into a transport levy, but I understand Durham and Northumberland will follow suit with that.
In an ideal world, we'd have the same powers as London has on retaining business rate receipts, but that's something not in our deal. The Metro Mayor will however have power to introduce a business rate supplement, which is supposed to cover expenditure on a project or projects that will promote economic development in the area. I guess it remains to be seen how that'll be used, but a good example of it would be applying it to businesses at the IAMP and Follingsby, in order to bring the Metro in.
I'm a bit confused by your final paragraph, as what you suggest with everyone entering bids with 'massive double digit % margins', would surely amount to price fixing? I'd envisage (and hope!) that we'd have a competitive process, whereby we end up with operators that genuinely want to deliver a good service on their routes. If not, then I think it furthers the argument to get the ban on municipal bus operators removed from law.
(24 Aug 2023, 8:07 am)RobinHood wrote TNE can barely afford the day tickets they are planning to implement, nevermind weekly versions.
Enjoy it, as come March 25, prices back to normal as the level of funding needed cannot be maintained.
Of course the big difference by the time that becomes a problem, is that the North East (LA7) region is electing it's first directly elected Metro Mayor. With that devolution settlement, comes the biggest shift of power back to public control for decades. It also opens up close to £1bn in ringfenced Transport funding in the first 5 years, with settlements beyond that for the life of the deal. It also, and separately, includes funding for the Metro.
The Metro Mayor will not only have the powers to franchise buses, but they've also got the power to devolve BSOG funding to be under the authority's control, along with the powers and Government-committed assistance to getting the likes of Network Rail & TOCs to buy in.
It of course remains a scenario that 'come March 25', but it sounds like an unlikely one at that.
(24 Aug 2023, 8:28 am)Storx wrote I'm assuming they'll have more money then though as Labour will very likely be in power and will use it as a reason why voting Kim in as mayor or why you should choose Labour next time around. Can't see them wanting the PR mess of losing those tickets and unless something major happens there's not a cat in hell chance the Tories are getting a majority at the next election.
Kim will do whatever her Keir Starver and Party HQ tell her to do. She of course pledges to bring buses back under public control, but Jamie Driscoll (Independent) pledges to go a step further with a Total Transport Network.
Unless something goes completely wrong, it'll be either Kim or Jamie that win the post next May, so I think it's a case of when - not if.
(24 Aug 2023, 5:31 pm)Bazza wrote Is the cap not being raised at the end of October to £2.50 and extended for another 12 months?
Different sources of funding. The £2/£2.50 fare cap is a scheme that the UK Government are funding directly. RobinHood, I believe, is referring to the BSIP funding pot for TNE. Of which the multi-modal day tickets are being funded from. The BSIP covering a three-year period which ends in March 2025.
