Former Norfolk Green boss Ben Colson fears the bus business is no longer attracting free-thinkers

Inept regulation and government interference is in danger of preventing a badly needed injection of young entrepreneurs from entering the bus business, one of the industry’s most senior figures has warned.

In his presidential address to the Omnibus Society, former Norfolk Green managing director Ben Colson painted a picture of steady regulation creep throughout his career; increasingly obstructive and incompetent administration from VOSA; a trend towards hostile regulation; funding squeezes which have hit business development; and bureaucratic mazes which operators need to negotiate. Together, he said they had combined to impinge on companies to the extent of creating a drain in management talent over the past decade and more.

Colson was speaking a month after his retirement and the sale of his company to Stagecoach, having seen all sides of the industry as a senior manager in a listed transport group, an independent operator and a member of various Department for Transport working groups. In 1996, he left Stagecoach Manchester, where he was commercial director, to establish his own business, and built Norfolk Green up from a four-vehicle operation to an award-winning company with a fleet of 70.

He recalled that from 2002 to 2007 regulations impacting the bus industry had been introduced at the rate of one every seven weeks. Along with four major acts of parliament, the continual “interference” had been enough to drive significant numbers of independent operators out of the industry in the ‘noughties’, creating a management skills gap that shows little sign of being filled.

“Not surprisingly people said enough is enough, I quit, so there has been a gap in management development,” Colson said. “We need a new generation of people to take up that slack.”

However, he was “not optimistic” that the current business environment is conducive to attracting the new blood required. Ongoing and recent examples of administrative issues he said continue to affect business and entrepreneurs’ willingness to invest include:

  • reduced ability to respond to market needs and increased commercial risk as a result of the gradual increase in registration times from three weeks in 1986 to 10 weeks at present;
  • and continual late processing of service registrations, preventing operators from introducing new services and altering timetables as planned, or running the risk of sanctions or warnings on future conduct if they do.

He characterised the record of the central registration and licensing office in Leeds as one of “significant delays, perverse decisions, damage to businesses, and disruption to delivery of bus services to users”, adding: “If there is anything the new management of DVSA should do to show they are different to the old lot it is to disband Leeds as a registration centre.”

In addition, there has been little sign of a significant slowdown in bureaucratic requirements. At one point in 2012, the industry was dealing with seven different consultations affecting it at the same time, distracting management attention from business issues and setting an ill-conceived challenge. “The dilemma was how you answer one depended on what happened with another,” he said. “It was like a matrix you couldn’t write an answer to.”

Colson implied that a further significant factor in recent sales of independent bus businesses was likely to have been the changes to concessionary fares reimbursement in 2011, which he calculated had effectively eliminated the funding available to many operators for innovation and service development. Cuts to BSOG (Bus Service Operators Grant), meanwhile, had left payments not too far from a level where the benefits may be outweighed by the government interference that accompanies “taking the King’s Shilling”.

He revealed that the main issue facing the business development director of one major bus company at present is a lack of resources to deal with the volume of independent operators seeking to sell up.

Colson reserved his most withering comments for the traffic commissioners who he said had presided over a “maladministration of justice and a complete breakdown of regulatory control”.

Their hostile approach was perhaps most visible from the current consultation on increasing punctuality targets to 100%. The incredulous reaction from passenger groups, local authorities and ministers, who Colson said were privately “incandescent with rage”, had led the commissioners to insist the proposals should be seen as an idea to gauge industry response rather than a serious proposal. But not before significant management time had been expended.

He also accused the commissioners of overstepping their remit by taking it upon themselves to rewrite rules rather than applying the law as intended. Notable examples included use of European Access to the Profession regulations to claim power parliament did not intend them to have and using it ill-advisedly to prevent company directors fulfilling the traffic manager role, with significant adverse cost and management implications for SME businesses.

More routinely, Colson said commissioners were too willing to use ill-repute sanctions to effectively punish operators twice for the same offence in a manner that “frivolously and irresponsibly” contravened any reasonable application of double jeopardy. On top of that operators had to put up with disgraceful and personal castigation at public inquiries that would not be permitted in a criminal court.

“I ask you is this the sort of regulatory incompetence that a budding entrepreneur would want to face?” Colson said. “Frankly I’d take my money and go elsewhere.

“But we desperately need those young entrepreneurs [because of the talent gap created by departures from the industry], and the government, to some extent, DVSA and above all the traffic commissioners are making that increasingly unlikely. “They just don’t seem to get it at all. Unless that changes it does not augur well for the industry.”

 

Cameron pledges to cut red tape

Prime minister David Cameron has announced that thousands of regulations will be abolished or amended to “get out of the way of small business success”. In a speech to the Federation of Small Businesses, Cameron said his intention is that his government will be the first in history to leave office with fewer regulations in force than when it came to power.

However, Ben Colson told Passenger Transport that previous experience of government ‘Red Tape Challenges’ in the bus industry meant he was “not optimistic” that there would be a significant impact, partly because of the large proportion of EU rules affecting the bus industry which the UK government can not amend.

The transport industry regulations which the DfT said will be simplified include guidance on breaks and rest for drivers. The Confederation of Passenger Transport welcomed the move in principle, but said it would “fight to ensure that the changes do not outweigh the benefits”.

 

This article, and many more, appears in the latest issue of Passenger Transport.

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