(5 hours ago)Adrian wrote It's quoted in the franchising scheme assessment that there's approximately 30,000 people commuting between the North East and Tees Valley daily, across all transport modes. Whilst clearly that's different from 30,000 people travelling by bus or train, it does however indicate that there's still a commuter market between the Tees Valley CA and the North East CA.

It's worth noting that they've said in the scheme assessment that it's unlikely to be a one size fits all. So whilst something like the full X10 could be seen as worthwhile to be a franchised cross-boundary service under NEMSA, to use your example, they could also see fit to curtail it at Peterlee and seek a contribution from the Tees Valley CA to continue the service into Middlesbrough. 

Of course, another operator would also be welcome to pick up the gap and request a service permit to run into Peterlee bus station. This may be more appropriate for something like Arriva's 23.

If the south end of the X10 is loss-making, why does GNE run it? My assumption is that it makes money, so  therefore there is no net cost for TV to share. And why would NEMSA offer a share of the profit to TV...? 

Under the draft scheme, I think 23 can't run under a permit unless it is a service secured by TV - hard to see that happening! Google maps makes the present route 9.5miles overall, with 4.6 miles in TV.  That's 53% in NEMSA, so it would not be eligible for a permit. Otherwise, perhaps an operator could extend the route at the south end to take it over 50% in TV; but it does not seem obvious to me where an extension at the south would go.
Operationally, it is currently part of the 22/24 cycle, too.

Arriva X22, X75 and X76 are other cases of commercial services running in TV where the current routes are well over 50% in NEMSA. 

So under the draft scheme, it appears there is little scope for permit operation across the boundary with TV. I wonder if the proposed 50% rule will attract consultation responses wishing more opportunities for penetrating services? I think the TfGM scheme must be much more open to penetrating services, as I believe the Burnley - Manchester X43 is not franchised, and must be at least 65% in TfGM; I'm sure there will be other cases.

The very worst result for passengers would be an unwillingness to operate franchised service4s across the boundary and a restrictive permit scheme that leads to curtailed routes. I would prefer cross boundary franchised routes, and I suspect that is the intention. All this really only matters for residents living in west Northumberland (re 685) and south Co Durham, so a long way from Gateshead...