This bus bill is just the ticket to create access to education and jobs

https://www.theguardian.com/public-leaders-network/2017/mar/02/bus-bill-create-jobs-boost-economy

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On 1 March, MPs again debated the bus services bill, a piece of legislation that is hugely important for millions of people across England in terms of access to education and employment or simply being able to get to local amenities such as the shops or a local hospital.

If you live or work in London this bill won’t apply to you because you don’t need it: Sadiq Khan has all the powers he needs to manage transport services in London and buses in the capital are a great success. This bill would give those same powers to city regional transport authorities across England, such as Transport for Greater Manchester or Merseytravel. They would be able to design and co-ordinate bus services in their area, including routes, ticketing, fares, and information: things everyone in London takes for granted.

There are two options for transport authorities to use: franchising or a new approach called advanced or enhanced partnerships.

Let me be frank: enhanced partnerships are a sop to the incumbent bus operators who claim that this bill is not needed. They don’t like the franchising option because they risk losing market share or margin or both. It is true that some services do run well but the problem is that too many do not, if they run at all. Bus services are too often infrequent, fares are rising and any route that is not profitable enough for the operators gets cut.

Outside London, passenger numbers are falling and have been for many years – made worse by cuts to local government subsidy. In my view, an enhanced partnership simply crystallises incumbent operators’ dominant current position and does nothing to enable new market entrants to come in to the market and compete with the big five companies, Stagecoach, First, Arriva, Go Ahead and National Express, that have most of the bus market in the UK.

What will shake up the present decline in passenger numbers and services is franchising, which is what Manchester and some other authorities want to use. That’s what works in London and it is the model adopted increasingly in many parts of the world.

With the franchising model, government does its job, which is to determine transport policy and strategy in the best interests of communities, and the private sector does what it does best: delivering those services on government’s behalf. There is real competition between operators (existing and new) to win the contracts – which drives up value for money, especially where there are subsidies, and quality. If the operator doesn’t deliver a good service they can be penalised or sacked.

The bill comes to the Commons from the Lords with two amendments: to give franchising powers to all local government bodies, not just combined authorities with directly elected mayors; and to give permission for municipal bus companies to be created – something explicitly banned in the government’s original bill.

The government wants to overturn both. In practice neither amendment is likely to be essential to the ultimate success of the bill. Any non-mayoral area will be able to apply to the secretary of state to have franchising powers – as Cornwall has done. It is critical that any early adoption of franchising works and that local government in England can learn from best practice here and around the world.

Second, while there are already some very high-quality municipal bus services, including Reading and Nottingham, it is important to avoid a commercial oligopoly being replaced by a public sector monopoly. In reality, though, none of the transport bodies currently looking at franchising have publicly expressed any intention of setting up their own companies. They are wise not to want to at this time when there are so few people in the public sector in the UK who have ever run a bus service or competed to do so.

If local authorities did need to form their own bus company, if they did not have any bidders for their franchises, for instance, they could almost certainly find a way of doing so through various legal means such as an arms-length company.

But what matters most right now is that this bill is passed in the current session, with no dilution of the franchising powers, so that the new city mayors elected in May can get on and use them.

Stephanie Elsy is managing director of Stephanie Elsy Associates, a business consultancy specialising in the public sector. She is an adviser to Tower Transit Group, a bus operator in London and Singapore. She was previously a local authority leader and a senior director at a large government contractor. Stephanie@stephanieelsyassociates.co.uk