The Welsh Government is bringing forward legislation for bus franchising to create an ‘easy to use’ bus network that can challenge car dependency

Lee Waters wants to turn the tide in favour of buses

“For more than 70 years we have made it easy to travel by car and harder to travel by public transport, that has to change.”

Those were the words of Wales’s deputy climate change minister, Lee Waters, as he unveiled plans to bring forward legislation to change the way bus services are delivered across Wales. The bus white paper for Wales, published on March 31, proposes bus franchising.

Waters said designing a system that is “easy to use, easy to access and well connected” would be his top priority to offer people a “real sustainable transport alternative” to the private car.

No funding certainty to underpin franchising

The Welsh Government unveiled its plans for bus franchising across Wales last week, promising improved services and lower fares. However, it admitted that it is not able to offer the long-term funding certainty the new system would ideally receive.

“Recurring costs” of £57.4m have been estimated for the franchised system, along with transitional costs of £91.3m and £23.1m of capital costs. The estimates were extrapolated from Cardiff, Wrexham and Pembrokeshire as case studies representing a city, town and rural area.

The Labour government has complained for many years that the deregulated system does not serve Wales well but has not so far legislated for change, unlike England and Scotland. Last week it launched a consultation on a white paper titled One Network, One Timetable, One Ticket, and subtitled “Planning Buses as a Public Service for Wales”.

In order to ensure public funding is used efficiently, various strategic objectives would have to be achieved, says the white paper. One of them is: “Multi-year sustainable funding allocations for bus services and bus infrastructure that enable long-range strategic planning and investment, optimal use of available monies and development of sustained improvement packages targeted to grow patronage.”

However, another section of the white paper contrasts the funding models for buses and trains. “Under the Railways Act model, the secretary of state publishes a multi-year Statement of Funds Available,” it observes.

The Welsh Government’s funding for buses comes from its annual block grant from the UK Government. The white paper explains: “Under the current devolved funding settlement, we are unable to provide the kind of long-term funding certainty such a system would ideally receive, but we will work with local government to develop an indicative funding envelope against which they can plan, to ensure we are all working towards the same objectives and planning the best bus network we are able to deliver within that budget.”

We will always have buses. The question is, what’s the best way to organise them?

Lee Waters, deputy climate change minister, told Passenger Transport that any part of Welsh public spending depended on the block grant. “We will always have buses. The question is, what’s the best way to organise them?”

He accepted that more public funding would be needed for buses than in the past and said that improving the bus network was one of many aspects of tackling climate change where additional funding was unavoidable.

The white paper proposes the creation of a supervisory board, to include a bus operator representative. The board will act as a guiding mind, coordinating the regional bus networks devised by Corporate Joint Committees. The CJCs – new regional groupings of local authorities – will coordinate the network plans of each unitary authority.

A National Centre of Excellence for Franchising, through Transport for Wales, will give all areas access to specialist resources to tender and manage franchise contracts.

“A key element of this approach is that contracting services in this way allows the public sector to control the ticket revenue, paying operators a fixed fee with opportunities to include incentives to reward high quality services and reliability, and penalties for failing to meet certain service standards.
“This means that choices can be made in the public interest about whether unprofitable routes are still worth running and how to reinvest income from profitable routes to support those socially necessary services.

“Whilst this may limit the profit operators are able to make from some routes and networks, it also ensures they can run services with a reliable income without bearing a revenue risk in the case of patronage falling due to economic downturn or other factors. Under a franchised system, the public sector assumes that risk to enable us to deliver the best network we can with the funding available.”

The white paper promises investment in bus priority and passenger waiting facilities, and to integrate investment in the bus system with land use planning to ensure that new development is focused on areas with strong bus services. It also expects franchising to enable coordination of fare reductions and other bus improvements with “actions to reduce car reliance”, in order to drive mode shift.

The government acknowledges that the “ideal network” will take time to develop and probably require iterative improvements. The ultimate goal is a comprehensive network serving the widest feasible range of destinations, at busy times and less busy times, with coordinated timetables for bus-bus and bus-rail connections and simple area-wide fares across all public transport modes.

White paper concerns

Bus operators largely offered a supportive stance to the Welsh Government’s plans for buses in Wales as part of its One Network, One Timetable, One Ticket white paper.

CPT Cymru said bus operators had worked closely with the Welsh Government during the pandemic, and looked forward to “continuing this approach to deliver the shared ambition of more frequent and reliable bus services”.

“Regardless of the regulatory model, close working between all partners is crucial to improving Wales’ bus services,” said CPT Cymru in a statement. “Ensuring that operators’ expertise in running services, their strong track record for innovation and existing strong relationships with passengers are fully utilised will be vital.

“The additional costs of a franchise model would be around £61m per year with no guarantees that improvements in bus services will be delivered any more quickly than through local authorities and operators working in partnership to improve services.

“To avoid a period of uncertainty that delays investment in improvements in services for passengers we now need to see a clear timetable and a solid financial commitment to fund the changes Welsh Government propose.”

Meanwhile, Cardiff-based bus and coach operator Adventure Travel said it believes the white paper’s proposals can work in principle, but questioned the significant funding stream required and the method by which bus operators won’t be able to react to customer needs.

Bus franchising has been on the cards for a number of years so today’s announcement is not unexpected

“Bus franchising has been on the cards for a number of years so today’s announcement is not unexpected,” said managing director Adam Keen. “Franchising is being discussed in various regions across the UK and indeed, some cities in England such as Manchester and Liverpool, are already quite advanced in their plans.

“Whilst there are certainly mixed feelings among various operators, Adventure Travel is supportive of the plans and we consider our company to be in a very strong position to adapt as required and therefore also in a good position to comment on the plans.”

Adventure Travel was bought by Singapore-based transport group ComfortDelGro in 2018 with possible future franchising models in mind. Keen pointed out sister company Metroline already successfully operates under London’s franchised system.

He continued: “We worked extremely cohesively with local authorities during the pandemic and it will be a great shame to end these useful, productive partnerships. The initial franchising plans are obviously in the early stages of development, but there are ‘holes covered in twigs’ where funding is concerned.”

Keen said running a franchise model for an authority is “an exceptionally expensive process” and he pointed to the experience in London and the recurring funding issues there in recent years.

If Welsh Government get this right, this can ultimately be a good news story, not just for existing bus customers but for potential new customers too

“It is also crucial that Welsh Government – whilst wanting to take the reins – should engage with bus operators as ultimately, we are the experts at what we do,” said Keen. “The amount of consideration, time and data analysis that goes into something as simple as a fare change is not clearly understood by most people and thus, I urge decision-makers to involve operators in building a model for Wales which is affordable, sustainable and deliverable. If Welsh Government get this right, this can ultimately be a good news story, not just for existing bus customers but for potential new customers too.”

Also offering a word of caution on funding for franchising was Campaign for Better Transport. Silviya Barrett, the group’s head of policy said the Welsh Government recognised the potential of buses to replace car journeys and tackle climate change, as well as their social importance.

“We welcome its vision for one network, one timetable and one ticket, which will make bus travel easy and attractive for everyone in Wales,” she said. “It is crucial that the new regulatory framework enables the government, local authorities and bus operators to work well together to deliver services that work best for passengers locally. The strategy must also be underpinned by the long-term funding commitment to make it a reality.”

This article appears in the latest issue of Passenger Transport.

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