FirstGroup agrees sale of 15-vehicle Kings Lynn bus operation to Norfolk Green, but Giles Fearnley denies that exit will mark beginning of an exodus

It isn’t the biggest deal in the UK passenger transport sector this year – but it could be one of the most significant. On April 15, FirstGroup announced that its First East England Buses subsidiary will sell its 15-vehicle bus operation in Kings Lynn to Norfolk Green, an independent operator based in the town.

It is the first time that FirstGroup, the UK’s biggest passenger transport group, has ever sold a commercial bus operation in Britain. This change in strategy reflects the change in management team at FirstGroup and its UK bus business, headed by Tim O’Toole and Giles Fearnley respectively.

However, Fearnley countered suggestions that the disposal of six routes in King Lynn will be followed by a flurry of withdrawals across the country.

“I know this is a huge thing for First but it’s really no big thing,” he told Passenger Transport this week. “It’s a relatively small number of routes and we’ll still have a depot in Kings Lynn.”

Asked if similar low-growth operations were currently being lined up for sale, he replied: “We want to develop our business and grow the top line. There are no further disposals on the cards. This [Kings Lynn] is one that did stand out and there was a very willing buyer.”

Fearnley said the decision to sell had only been taken because FirstGroup could not see how it could grow its operation sufficiently to offset the effect of public spending cuts. Since the start of April this year, there has been a reduction in the amount of money provided by local authorities for concessionary passholders and for socially necessary bus services. And from April 2012 the Bus Service Operators Grant (BSOG), which is provided by central government to partially offset the excise duty on fuel, will be reduced by 20%. Meanwhile, in Kings Lynn, the opportunity for FirstGroup to grow its business was further constrained by the increased presence of rival operator Norfolk Green in the town.

With a population of just 43,000, it seems that Kings Lynn was not considered big enough to sustain two competing bus companies in hard times, and FirstGroup has thrown in the towel. The statement issued by the group on April 15 said: “First believes that the town services more closely match the business objectives and plans of the local operator Norfolk Green.”
Bus drivers on FirstGroup’s Kings Lynn services will now transfer to Norfolk Green with surplus vehicles redeployed within the region. First East England Buses will continue to have an operating centre in Kings Lynn to support its flagship X1 service, which operates from Peterborough through Kings Lynn, Norwich and Great Yarmouth to Lowestoft.

Commenting, Alan Pilbeam, managing director, First East England Buses, said: “The effect of public spending cuts in the year ahead will create challenges for local bus operators in the area. By selling our Kings Lynn town services to Norfolk Green we can concentrate on further improving and developing our flagship X1 service, which links the major towns and cities in the east of England. Norfolk Green will continue to ensure the ongoing welfare of our Kings Lynn drivers and we will maintain a base in the town to support the X1 service.”

FirstGroup’s change of heart will be a relief to Norfolk Green, which has been engaged in successive bouts of intense competition with its larger rival on key corridors in Kings Lynn.

“By increasing the size of our business, we should be better positioned to face the next round of public funding cuts than either of us would have been separately,” commented Norfolk Green managing director Ben Colson.

Norfolk Green started out in 1996 with four buses. It now has a fleet of 55 buses on a network that spans 80 miles across Norfolk, Cambridgeshire and Lincolnshire. The company was named ‘Bus Operator of the Year’ at the 2010 UK Bus Awards.

Colson said there would be changes to timetables on the routes his company is taking on, but his aim is to keep them to a minimum. 16-19 year olds will meanwhile enjoy no-ID discounted fares, a benefit the Norfolk Green offers across its entire network