Thought this could use its own thread.

It looks like the NECA Cabinet on 30th July will agree to issue a notice of intent to prepare a Franchising Scheme Assessment (FSA). This is a legal step that the authority needs to take.

The report is extensive and covered in page 73 to 313 of the agenda pack: https://www.northeast-ca.gov.uk/download...-07-24.pdf

The Chronicle has also done a write up, wirh their usual tabloid style headlining: https://www.chroniclelive.co.uk/news/nor...t-29606117

Interestingly, Go North East and Arriva seem to now be in full support. Oh how times change!

In full support, as long as they get the contracts! Stagecoach might think otherwise though if the North East is a profitable as some on here claim it is.

(25 Jul 2024, 1:52 pm)deanmachine wrote In full support, as long as they get the contracts! Stagecoach might think otherwise though if the North East is a profitable as some on here claim it is.

That might be why Stagecoach were the only one of the main three not to make a positive statement about it.

(25 Jul 2024, 4:52 pm)Shrek wrote That might be why Stagecoach were the only one of the main three not to make a positive statement about it.

According to the papers posted above, Busways made a £1.2m loss in 22/23 so I’d be very surprised if they weren’t also in favour of a more reliable revenue stream via franchises.

(25 Jul 2024, 4:52 pm)Shrek wrote That might be why Stagecoach were the only one of the main three not to make a positive statement about it.

(25 Jul 2024, 9:34 pm)markydh wrote According to the papers posted above, Busways made a £1.2m loss in 22/23 so I’d be very surprised if they weren’t also in favour of a more reliable revenue stream via franchises.

Stagecoach's national position appears to be to still oppose such moves. Though on the other hand, still happy to bid for the work.

Go-Ahead appear to be nationally in favour of it, if that's what LAs opt to do, though they claim to remain committed irrespective. I'm not sure Arriva have a national position, but they certainly responded favourably to the Liverpool City Region's plan.

(24 Jul 2024, 8:06 pm)Adrian wrote Thought this could use its own thread.

It looks like the NECA Cabinet on 30th July will agree to issue a notice of intent to prepare a Franchising Scheme Assessment (FSA). This is a legal step that the authority needs to take.

The report is extensive and covered in page 73 to 313 of the agenda pack: https://www.northeast-ca.gov.uk/download...-07-24.pdf

The Chronicle has also done a write up, wirh their usual tabloid style headlining: https://www.chroniclelive.co.uk/news/nor...t-29606117

Interestingly, Go North East and Arriva seem to now be in full support. Oh how times change! 

Would have never happened in Tim and/or Tom Dodds days.

(26 Jul 2024, 9:58 am)Adrian wrote Stagecoach's national position appears to be to still oppose such moves. Though on the other hand, still happy to bid for the work.

Go-Ahead appear to be nationally in favour of it, if that's what LAs opt to do, though they claim to remain committed irrespective. I'm not sure Arriva have a national position, but they certainly responded favourably to the Liverpool City Region's plan.

I'm not surprised at GoAhead considering the only place they have a network in an area which is realistically going to ever do it is the North East and it's a basketcase as an understatement. 

More money for them when they bid in areas they've never worked in prior to the franchsing. 

Stagecoach being the polar opposite so I'm not surprised they're the opposite and I can't blame them either really.

Be interesting to see how First react as their network is similar to Stagecoach but the areas they operate in haven't got very far yet. Yorkshire etc.

(26 Jul 2024, 6:37 pm)Storx wrote I'm not surprised at GoAhead considering the only place they have a network in an area which is realistically going to ever do it is the North East and it's a basketcase as an understatement. 

More money for them when they bid in areas they've never worked in prior to the franchsing. 

Stagecoach being the polar opposite so I'm not surprised they're the opposite and I can't blame them either really.

Be interesting to see how First react as their network is similar to Stagecoach but the areas they operate in haven't got very far yet. Yorkshire etc.

I'm not sure that's the reason? They had mixed results from the Manchesrer scheme. I think they'd have hoped to keep Queens Road, if they had the choice.

Devolution and additional powers is only going to increase too. I think every local and combined authority will be looking at Manchester's franchising in particular.

(26 Jul 2024, 10:35 pm)Adrian wrote I'm not sure that's the reason? They had mixed results from the Manchesrer scheme. I think they'd have hoped to keep Queens Road, if they had the choice.

Devolution and additional powers is only going to increase too. I think every local and combined authority will be looking at Manchester's franchising in particular.

I don't know, I would say it is. They won massively in Manchester imo, from a questionable depot that First wanted shot of to a massive tranche of routes with absolutely no risk at all to them commercially.

They've now got a massive a chance of running buses in Leeds, Liverpool, Sheffield and so on which currently they have no operations in with absolutely no commercial risk in doing so. I personally, can't see the likes of Brighton or Oxford (they actively blocked it in 2021 due to complexities) ever going for it, or at least, not anytime in the short term future anyway which are GoAhead's money makers.

Very different to the likes of say First who are on track to lose Glasgow, Leeds, Bristol and Sheffield. Take those 4 areas away and it's looking a very very weak company as I'm not sure the likes of Stoke is printing money for them.

(26 Jul 2024, 10:35 pm)Adrian wrote I'm not sure that's the reason? They had mixed results from the Manchesrer scheme. I think they'd have hoped to keep Queens Road, if they had the choice.

Devolution and additional powers is only going to increase too. I think every local and combined authority will be looking at Manchester's franchising in particular.

Only if Government money is forthcoming and given how local authorities have been spending transport money up here, I'd be giving the North East a wide berth if I was Rachel Reeves

(27 Jul 2024, 5:17 am)DeltaMan wrote Only if Government money is forthcoming and given how local authorities have been spending transport money up here, I'd be giving the North East a wide berth if I was Rachel Reeves

I suppose it's what happens, when you're spending money without any real say in the options available. Sure, the Enhanced Partnership has brought in the TNE tickets (which are great!), but it's largely being used to splash money up the wall on services that operators cut some 18 months to 2 years earlier. 

If it was cut because it wasn't working, I don't understand why you'd try and resolve it by throwing money at it, rather than trying something different. The operators certainly won't do it with their cash, so why should it be different with public cash.

Interestingly, from the report that is going to NECA Cabinet next week, it states that "The estimate is that approximately 43% of bus operator income during 2022/23 is directly attributable to public sector funding streams. This funding includes secured service payments (14% of total), concessionary travel reimbursement (17% of total), some coronavirus recovery support (5% of total), as well as BSOG and reimbursement for the £2 fare cap. This figure is consistent with pre-pandemic levels – public sector support in the North East was 40% in 2018/19 - as well as similar analysis conducted in other regions."

That is a lot of money to give to someone, without any real say in how it operates.

I've spent some time over the weekend skim reading through the report to the NECA Cabinet next week, which I posted earlier in the thread.

Essentially, I think as most of us would expect, the report concludes that there's a "compelling case for change for the region’s bus service because of the instability in the bus network and the need to progress towards regional objectives.", and is recommending the Mayor and Cabinet proceed to a Franchising Scheme Assessment (FSA).

It's worth a read through for yourselves, but some key takes for me:

• A number of options are assessed in the report, but they mainly focus around either expanding the current EP, and evolving it to an "EP Max/EP+". This is described to retain the current delivery model while seeking to push the boundaries of the legislative framework, subsidy regulations and competition law to deliver expansive benefits for passengers. Very much a voluntary partnership, where the operators can pick and choose what they go with.
  
• The other option being a franchised bus network. Franchising significantly changes the operational structure. Buses are brought into public control meaning the authority can determine routes, timetables, fares and vehicle standards within the franchised area.
  

On the Franchising Scheme, the report claims:

• It would be a highly demanding process in terms of costs, increased risk and timescales. 
  
• The FSA would compare franchising to other operational models and more comprehensively analyse the implications of franchising for the region. Conducting an FSA would require around £8.5 million in funding.
  
• If the decision after the FSA is to proceed with Franchising, then it's estimated this would likely take just over 5 years for the first bus services to enter operation, but a long estimate is between 4 and 7 years.
  
• The FSA itself (inclusive of audit, consultation and approvals) is likely to take around 2 years 8 months. Long estimate is 2 years to 3 years 9 months;
  
• Whereas the implementation and procurement may take between 2 years to 3 years and 6 month
  

It should be noted it is Labour Party policy to accelerate and de-risk the franchising process, so these timescales could dramatically decrease, subject to legislative change.

The report obviously goes into a lot of background and factors to support the decision. There's some pretty damning points within that, and some of the key ones for me are:

• Productivity: There's a claim that our transport network has a direct impact on the productivity levels in the North East. Poor infrastructure, including weak transport links, are some of the factors that contribute to lower levels of productivity. For labour productivity, output per hour worked in the North East was 17.4% below the UK average in 2021.
  
• Transport-related Social Exclusion: 31.5% of residents in the North East (622,000 residents) are at risk of transport related social exclusion, compared to 21% of northern England, and 18% of England. There's a map that shows our region, and it's mainly around the ex-Coal Field communities and the Northumberland Coast line, where it's rife.
  
• Funding: BSOG+ ends 31 March 2025
  
• Funding: The estimate is that approximately 43% of bus operator income during 2022/23 is directly attributable to public sector funding streams. This funding includes secured service payments (14% of total), concessionary travel reimbursement (17% of total), some coronavirus recovery support (5% of total), as well as BSOG and reimbursement for the £2 fare cap. This figure is consistent with pre-pandemic levels – public sector support in the North East was 40% in 2018/19 - as well as similar analysis conducted in other regions. Despite this high level of investment, the bus network has seen long term decline - 31% shrinkage since 2010 and 36% reduction in patrionage.
  
• Growth: North East is performing worst, compared to other areas, in growing passenger numbers post Covid. Most follow a similar upward spike from the big dip in 2020/2021, but Tyne and Wear's upward growth is a lot slower, whereas Durham and Northumberland has almost flatlined.
  

There's some interesting quotes from consultation too, including the Big Bus Survey and engagement with stakeholders.

• Respondents were asked how their perception of buses has changed over the last few years. A strong theme for this question was a decline in the perception of the bus services, with around 360 uses of phrases that indicate a lower perception. “Got worse” “Less frequent” “less reliable” “less buses” “Services cut”. “Worse” occurs 195 times, “better” 65 times and “Much better” only eight times.
  
• “Expensive” was the third most common word people used when asked what three words spring to mind when they thought about buses in 2023"
  
• Stakeholders commonly felt that current bus services in the North East did not meet the needs of our population, particularly those in work. Services were seen as too unreliable and infrequent for people to use them to travel to their workplace.
  
• Interviews coincided with the GNE drivers’ strike and some stakeholders argued the strike had further weakened confidence in the network – pushing some users to purchase cars and leading more people to view buses as unreliable; perceptions that could take significant time to reverse, even following the strike’s conclusion.
  
• Stakeholders felt that the bus services did not meet the standards they expect due to being infrequent and unreliable. Stakeholders were concerned about the ability of the current network to meet decarbonisation goals and felt that the drivers’ strike had weakened confidence in the network- leading to more people travelling by car. Interviewees also noted that they were paying more in subsidy to operators than they ever had before to sustain important services. Reform was seen as a desirable response to these issues.
  

Cross boundary services would need to be carefully considered as part of a franchising scheme. Only services within the boundaries of the scheme area can be franchised – cross-boundary services would either need to be exempted or subject to service permits. Service permits can insist on things like ticket acceptance or vehicle standards.

Public ownership was assessed in the report, but my reading is that the consensus doesn't feel that this is a good option at this stage. The report does state "Legislative change could enable the authority to establish a new public operator. The default position is that this new operator would need to compete against established private sector incumbents in the current deregulated market to gain market share. Most benefits of public ownership require the municipal operator to control a significant proportion of the network. It is theoretically possible for a publicly owned operator to compete for  contracts under a franchised model, but the authority could not give preference to the operator solely because it was publicly owned."

Most interesting for me, is that a lot of what is covered in this report, is exactly what a handful of us on here have argued is the case or what is required for years now. Sometimes even ridiculed for it.

The QCS proposals a decade ago should have had alarm bells ringing, but on the most part, operators have continued on into the abyss.

Is franchising being looked at for the whole of the North East?

So we could see different operators across the region? Darlington might not be Arriva, Slatyford might not be Stagecoach and Northumberland might not be dominated by Arriva?

(28 Jul 2024, 1:30 pm)OrangeArrow49 wrote Is franchising being looked at for the whole of the North East?

So we could see different operators across the region? Darlington might not be Arriva, Slatyford might not be Stagecoach and Northumberland might not be dominated by Arriva?

As far as I’ve seen, the mayor (can’t remember the female person named) covers Northumberland/County Durham and Tyne and Wear), while Cleveland area including hartlepool comes under a male person mayor, which I’ve seen on media has mentioned has changed his mind about franchising.
Other neb members might have more info

I am interested to see how much difference franchising makes. Presumably Northumberland will still be Arriva.

(28 Jul 2024, 5:04 pm)OrangeArrow49 wrote I am interested to see how much difference franchising makes. Presumably Northumberland will still be Arriva.

Not necessarily, any bus operator in the UK etc.. can bid for the Northumberland, if Northstar gets a big financial backing there could bid and win those routes in Northumberland, or Northstar could gain running Sunderland services from the Wheatsheaf depot, Stagecoach could lose areas in Tyne and Wear etc…., too much ifs and buts, it will be a canny few years yet.


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(28 Jul 2024, 5:36 pm)cbma06 wrote Not necessarily, any bus operator in the UK etc.. can bid for the Northumberland, if Northstar gets a big financial backing there could bid and win those routes in Northumberland, or Northstar could gain running Sunderland services from the Wheatsheaf depot, Stagecoach could lose areas in Tyne and Wear etc…., too much ifs and buts, it will be a canny few years yet.


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Is this depot currently Stagecoach? Surely if north star won several routes in Sunderland they would have to find there own storage or are you suggesting they would lease space from Stagecoach?  I assume stagecoach own the land and they have made there millions by just giving stuff away?

I would assume Most route would be won by current operator as the have lowest overheads as already based in the area.  Maybe the 44,45,43 arriva routes could be run by stagecoach or GNE 9 God forbid) as they have garages near the start of the route.  

Unless of course company's factor in dead mileage into the tender which I would think would make them more expensive again?

(28 Jul 2024, 4:28 pm)cbma06 wrote As far as I’ve seen, the mayor (can’t remember the female person named) covers Northumberland/County Durham and Tyne and Wear), while Cleveland area including hartlepool comes under a male person mayor, which I’ve seen on media has mentioned has changed his mind about franchising.
Other neb members might have more info

Kim McGuinness is the Mayor. When they refer to North East now, theyre generally referring to the political boundary, not the geographical one. Political boundary is the LA7 area (5x Tyne and Wear Councils, Durham Unitary Authority and Northumberland Unitary Authority)

The remainder of the geographical North East is the Tees Valley Combined Authority (Darlington, Hartlepool, Middlesbrough, Stockton, Redcar & Cleveland)

You're correct. Tees Valley Mayor, Ben Houchen, has said he doesn't believe it's the correct way. They're not even going to look at it at this stage.

The only point of issue is going to be the cross-boundary services (e.g. 23/24, 58, X10, X12?). If they're a North East CA franchised service, then they'll have to be registered with the Traffic Commissioner for the operating area outside of the CA boundary. Inside isn't an issue, as the Combined Authority would replace the role of the Traffic Commissioner in service registration.

If they're a commercial service operating from outside the Combined Authority area (e.g. 1, 7, X12?, X26/X27), then the operator (Arriva in this case) would need to seek a service permit from the Combined Authority to serve stops within the boundary. As part of this, they could mandate ticket acceptance or rules, for example.

(28 Jul 2024, 5:36 pm)cbma06 wrote Not necessarily, any bus operator in the UK etc.. can bid for the Northumberland, if Northstar gets a big financial backing there could bid and win those routes in Northumberland, or Northstar could gain running Sunderland services from the Wheatsheaf depot, Stagecoach could lose areas in Tyne and Wear etc…., too much ifs and buts, it will be a canny few years yet.


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Yep, it's a competitive tender process, so anyone is free to bid for any work. One of the options that will be considered under the FSA, is whether an asset acquisition is deemed necessary. In Manchester, this was a depot acquisition. South Yorkshire are also targeting the purchase of the legacy bus fleets.

In terms of depots, with the cuts over the last two decades, I think we're missing a couple of depots in strategic locations. Not having a location in East Durham is problematic, as is the lack of depots further into Noerhumberland. 

The role of smaller operators will depend on how the franchising scheme builds the lots. I hope they learn from Manchester and take the time to ensure that there is sufficient levels of work for smaller operators to bid for smaller lots of work, or even individual services, either on a sole or consortium basis. Doing so, imo, should allow the tenders to remain competitive.

(28 Jul 2024, 5:52 pm)Rob44 wrote Is this depot currently Stagecoach? Surely if north star won several routes in Sunderland they would have to find there own storage or are you suggesting they would lease space from Stagecoach?  I assume stagecoach own the land and they have made there millions by just giving stuff away?

I'll not repeat what I added above, but doesn't the depot become a useless asset, if the current occupier doesn't run any franchised services in the area? They can't run commercial ones, so they'd be paying for a big empty space.

They won't be giving it away, but I think it's likely the North East CA will buy the asset. Let's not forget that one of the Mayor's devolved powers, is the ability to issue compulsory purchase orders.

(28 Jul 2024, 8:01 pm)Adrian wrote I'll not repeat what I added above, but doesn't the depot become a useless asset, if the current occupier doesn't run any franchised services in the area? They can't run commercial ones, so they'd be paying for a big empty space.

They won't be giving it away, but I think it's likely the North East CA will buy the asset. Let's not forget that one of the Mayor's devolved powers, is the ability to issue compulsory purchase orders.

Yeh I suppose But forgive me and I might be proved wrong but I just cant see

North star bid for all arriva northumbria routes

North star win all the routes between haymarket and Berwick

North star offer arriva "x" amount for garages in northumberland but arriva say no we are taking our bus stock to Liverpool and selling the land for houses.

Mayor jumps in and buys land at going rate i assume???

North star now has a garage with not enough buses ( or drivers for that matter) Change north star to any other company and its still the same.

I just can see it happening.  I bet 20p on 90% of the routes continued to be operated by the current operator unless THEY dont want to run them. 

But as you have put above we could all have passed to the other side if its going to take 5 years!

(28 Jul 2024, 8:51 pm)Rob44 wrote Yeh I suppose But forgive me and I might be proved wrong but I just cant see

North star bid for all arriva northumbria routes

North star win all the routes between haymarket and Berwick

North star offer arriva "x" amount for garages in northumberland but arriva say no we are taking our bus stock to Liverpool and selling the land for houses.

Mayor jumps in and buys land at going rate i assume???

North star now has a garage with not enough buses ( or drivers for that matter) Change north star to any other company and its still the same.

I just can see it happening.  I bet 20p on 90% of the routes continued to be operated by the current operator unless THEY dont want to run them. 

But as you have put above we could all have passed to the other side if its going to take 5 years!

I mean, there's a lot of hypothetical questions there, but to try and answer some of them...

There's no link between an operators current services and what may or may not be included in a tender. It'll ultimately be up to the Combined Authority to decide. They may even decide to redraw some of the network at the same time. Just because GNE run X number of services in Gateshead, doesn't necessarily mean that there'll be one tender compromising with the same X number of Gateshead services. Its very early days, and we'll only find out more during and after the FSA has been drawn up.

Again, it's early days in terms of what will happen to the depots. The report states the FSA will look at this, and personally (but merely my opinion) I think the most sensible option is NECA purchase and lease back to the operator(s) running services in the area.

Arriva can of course refuse, in your hypothetical situation, but it'll almost certainly go down to a compulsory purchase and they'll get the value for it. That obviously depends on condition etc.

Arriva could also hypothetically take their fleet to Liverpool (or wherever else they like - it's their buses), but unless they win a massive amount of work than they currently have, they're going to have a lot of spare buses. Given the Liverpool City Region are going through the same process, I'd envisage Arriva ending up with less work than they currently have.

Time is of course a factor. There's so much factored in, because there's that many ifs and buts, and that's before statutory consultation starts. It is of course Labour Party policy to speed the statutory process up, so I'd expect the Mayor to be lobbying the DfT on this already.

I know Labour is in power but there seems to be a lot of spending going on..... got to be a few million quid to buy each depot.

Arriva are short of buses all over arnt they??? Loads of 44's been canceld and it rumour due to lack of buses rather than lack of drivers.

Bring back pre 1986 I say!!!

(28 Jul 2024, 9:31 pm)Rob44 wrote I know Labour is in power but there seems to be a lot of spending going on..... got to be a few million quid to buy each depot. 

The Devolution Deal, including budget, was agreed pre-election. It's nothing to do with who the current Government are.

https://www.gov.uk/government/publicatio...ution-deal

https://www.gov.uk/government/publicatio...ution-deal

Report approved with very little debate or input, so off to develop the FSA they go.

(30 Jul 2024, 3:47 pm)Adrian wrote Report approved with very little debate or input, so off to develop the FSA they go.

The right result, but with the wrong people in charge IMHO. I hope they take on board the opinions of more competent people.

(30 Jul 2024, 6:49 pm)solsburian wrote The right result, but with the wrong people in charge IMHO. I hope they take on board the opinions of more competent people.

I agree, and given they'll still assess the franchising scheme versus other options within the FSA, it's the only option imo.

Hopefully the amount of money they've set aside will allow them to get some outside knowledge into the Organisation, and hopefully Gannon's involvement will be limited to counting paperclips.

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(30 Jul 2024, 7:47 pm)Adrian wrote I agree, and given they'll still assess the franchising scheme versus other options within the FSA, it's the only option imo.

Hopefully the amount of money they've set aside will allow them to get some outside knowledge into the Organisation, and hopefully Gannon's involvement will be limited to counting paperclips.

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Does he actually do much? Tobyn Hughes on the other hand though, that bloke is unsackable. In fact he keeps getting promotions and I'm still unsure what he's done to deserve it. Absolute failure at the Metro when he was in charge, not that it's improved much since he's left either. Believe he's officially in charge of the transport side of this now aswell.

(30 Jul 2024, 7:50 pm)Storx wrote Does he actually do much? Tobyn Hughes on the other hand though, that bloke is unsackable. In fact he keeps getting promotions and I'm still unsure what he's done to deserve it. Absolute failure at the Metro when he was in charge, not that it's improved much since he's left either. Believe he's officially in charge of the transport side of this now aswell.

Tobyn hasn't really had a promotion. Just a sideways step to the authority, rather than the executive. He's director of Transport and NECA now.

I agree on Metro. Although it was privatised for much of his tenure, I struggle with how that contract was allowed to run for it's duration. The performance was disastrous for much of it.

Gannon is a Cllr and Portfolio holder. He'll have a level of delegated authority through the sub committee, I'd have thought, but the work of a local authority is carried out by officers. Councillors are just the decision makers (which is worrying, in this case)

(30 Jul 2024, 8:13 pm)Adrian wrote Tobyn hasn't really had a promotion. Just a sideways step to the authority, rather than the executive. He's director of Transport and NECA now.

I agree on Metro. Although it was privatised for much of his tenure, I struggle with how that contract was allowed to run for it's duration. The performance was disastrous for much of it.

Gannon is a Cllr and Portfolio holder. He'll have a level of delegated authority through the sub committee, I'd have thought, but the work of a local authority is carried out by officers. Councillors are just the decision makers (which is worrying, in this case)

Yeah fair point on the side stepping to be fair.

I'm not sure I fully blame Arriva/DB for the mess with the Metro mind, but by god were the they the scape goat. Let's be honest it's not as if the thing has gone from a wreck to a world class reliable system since they lost the contract. The problems have been pretty much the same ever since, if anything, it's got even worse but obviously that's all Stadler's fault if you believe the Nexus communications.

Yeah that's what I thought he was, pretty much a yes man really. Didn't think he was actively planning stuff, I'm not sure who really works for NECA it's all pretty hidden other than Tobyn Hughes.

Mind speaking of Nexus, there's got to be serious questions whether it should really exist at all or whether there should be a transport body for all the 7 council areas, ultimately controlled by NECA, similar to Transport For Manchester. I'm really not sure how franchising is going to work otherwise.

(30 Jul 2024, 8:25 pm)Storx wrote Mind speaking of Nexus, there's got to be serious questions whether it should really exist at all or whether there should be a transport body for all the 7 council areas, ultimately controlled by NECA, similar to Transport For Manchester. I'm really not sure how franchising is going to work otherwise.

It still has functions as the transport authority for the 5x Tyne and Wear Councils, reporting to NECA, but I think it's looking increasingly likely that it'll be absorbed into NECA. Similar to what South and (I think?) West Yorkshire have done. The lines are becoming increasingly blurred between the two organisations now.

I think a lot of the staff are working directly for NECA at the moment, aside from Metro-related staff remaining with Nexus?