Local leaders seek to reverse 40 years of UK bus privatisation
Franchise network run by Transport for London, a local government body, hailed as a way forward
Nearly 40 years after local bus services across most of Britain were privatised, momentum is building to reverse the move in many areas.
Margaret Thatcher’s 1986 reforms were intended to increase competition and improve a service relied upon by millions of passengers a day. However, after years of declining ridership, local leaders have begun to unpick the overhaul by the Tory prime minister, arguing it has failed on every measure.
They point to the success of London’s extensive bus network, which was left untouched by deregulation and remains under the control of Transport for London, a local government body.
As bus journeys across the capital have grown, under a franchising model common across much of Europe by which private companies run services while TfL retains overall control, ridership elsewhere has fallen by 40 per cent since privatisation and car ownership has risen, according to government data.
Local leaders argue that adopting a similar franchising model to London’s across the country is essential both to closing the economic divide with the capital and to meeting climate change targets.
Liverpool is among those to have adopted the system. “The reason we’re franchising our buses is not based on ideology, but on simple economics,” said Steve Rotheram, Labour mayor of Liverpool city region. Public control would put “passengers before profit”, he said, by allowing local leaders to keep more of the income from fares and reinvest it in the network and in boosting productivity.
“We’ve got decades of evidence that a deregulated system leaves behind the very people who need it most,” he added.
Thatcher’s 1980s reforms allowed private operators across the UK, except for London and Northern Ireland, the choice of which bus services to run and how much to charge.
Buses remain by far the biggest form of public transport — accounting for about half of all journeys. But BBC analysis has found that, in some areas, networks have shrunk by up to half, as operators have cut less profitable routes and local authorities have been forced to withdraw subsidies in response to cuts in central government funding.
Rotheram has taken his cue from another Labour mayor in north-west England — Greater Manchester’s Andy Burnham — who in September began using the franchising model to bring buses back under public control by tapping into powers given to local authorities in 2017.
“I think in some ways it represents the coming of age of English devolution, in that a decision has been taken that rows back some of the misguided policies of the 1980s,” Burnham said at the time.
In recent weeks other Labour mayors, in West Yorkshire, Cambridgeshire and Peterborough, have announced plans to follow suit. The Labour government in Wales is also looking at similar changes.
Local politicians from other parties are also considering an overhaul of local bus services, including Andy Street, Tory mayor of West Midlands, Oxfordshire county council, run by Liberal Democrats and Greens, and Glasgow council, led by the Scottish National party.
Andrew Carter, chief executive of the Centre for Cities think-tank, said “rubbish” public transport was increasingly considered a factor in the poor economic performance of UK cities relative to those in other European countries.
Deregulation represented an “old experiment”, added Carter, one that is “universally regarded” across parties, cities and districts as “having failed”.
Research by data analyst Tom Forth in 2019 concluded that Birmingham’s size — and therefore access to its labour market — effectively halved during rush hour because of poor bus services. His research concluded that this could explain most of Birmingham’s productivity gap with its European comparators.
Those findings have been particularly influential in central government, which has begun to take a more active interest in bus policy, according to one local transport official.
A Centre for Cities paper on Glasgow’s public transport network that argued for a switch to franchising drew similar conclusions last month, estimating that better bus services could increase the city’s effective population by 24 per cent.
Graham Vidler, CEO of the Confederation of Passenger Transport, the trade association for the UK’s bus and coach sector, said he expected franchising to “only gain more prominence in the coming months”.
But he warned financial support was crucial. “In the end, it will take more than a change of regulatory framework to give millions of passengers the service they deserve,” because networks “require a real, sustained investment in the things that matter most to passengers.”
Alistair Hands, regional managing director at Arriva UK Bus, which runs services in London, Wales and Liverpool, said experience in the capital had shown franchised systems could work well, “when combined with measures to promote passenger growth”, such as bus priority lanes. Echoing Vidler, he said that included the need for sustained, long-term investment.
The strain on local government finances is seen as the biggest impediment to change. Regional mayors pushing for franchising have met resistance from council leaders worried about taking on further funding obligations given the dire state of budgets.
Upfront costs alone can run into tens of millions of pounds. Greater Manchester had to budget £85.7mn just for buying and refurbishing bus depots. Burnham has already proposed a hotel tax as one revenue stream once the existing bus funding package runs out in 2025.
Many local leaders believe more central government subsidies will be needed to build out networks. State funding for bus services is low compared to rail, despite a Department for Transport analysis of major bus schemes showing they “delivered benefits worth more than four times their cost”.
Although the UK government has committed new funding to English bus networks since 2019, passengers still only receive 32 pence in subsidy per journey, according to CPT analysis, compared to £3.32 for rail passengers. Scotland has larger gaps.
Sandy Easedale, owner of McGill’s, the largest independent bus operator in Scotland, who is opposed to the changes, warned that “hundreds of millions” of pounds in investment would be needed to create the sort of improved networks being mooted by local leaders.
“They want this wonderful service everywhere, which is fine, but somebody has got to pay for it,” he said. He promised to “fight tooth and nail in the courts” against any attempts to shift to franchising.