Barclay Davies, Bus Users UK’s Director for Wales, examines two new reports tackling the issue of bus franchising in Wales
Taking back control seems to be the mantra of most politicians in response to the numerous challenges facing the UK today. Welsh Government is no exception when it comes to its ambitions for improving bus services. The thinking is that the de-regulated market has failed, and only taking back control of services through a franchised network will give Welsh Government the powers necessary to make the improvements passengers need.
In 2022 we saw the publication of Welsh Governmentâs White Paper âOne Network, One Timetable, One Ticketâ. It set out the long term vision of a bus network that works for all and makes public transport the easy option, encouraging modal shift, reducing congestion and improving air quality. The response has been overwhelmingly positive and the case for franchising by Welsh Government appears to have been made.
Ask the average passenger, however, and youâll find they arenât in the slightest bit concerned about what regulatory framework is in place. What does concern them is having access to a regular, reliable, clean, comfortable and affordable bus service that gets them to where they need to be.
As the franchising debate rumbles on, the organisation representing the interests of bus operators in Wales, CPT Cymru, has produced two timely research reports: âThe Future of Bus Regulation in Walesâ and âY Ffordd Gymreigâ. The first of these looks at the context for reform and examines the social and economic contribution made by bus services.
âThe Future of Bus Regulation in Walesâ offers a thoughtful critique of the Governmentâs White Paper and compares the proposals for franchising to options such as maintaining the status quo, a partnership approach and other regulatory systems including alternative franchising models. It outlines some 18 risk factors associated with Welsh Governmentâs preferred franchising model ranging from affordability to the potential loss of management expertise and suggests that, where a small/medium sized operator may not wish to be part of a franchised environment, Welsh Government may be forced to step in as the operator of last resort. It also outlines what it sees as the key decisions Welsh Government and Transport for Wales (TfW) will need to make.
Regardless of the regulatory system Welsh Government decides to adopt, the report makes it clear that running bus services in Wales is challenging and requires long-term funding commitments. Taking back control also means taking on the risk, as the experience of the rail franchise in Wales has highlighted.
Welsh Government recently announced a revised budget to bridge a funding gap between its commitments and the funding settlement from Westminster. Despite cuts to many departmental budgets, the funding for TfW rail services increased by some ÂŁ125 million to protect jobs and services as revenue fell short of pre-COVID projections. While Ministers in Welsh Government indicated there was âno open chequeâ for rail services, the CEO of TfW said that additional funding would be required for the foreseeable future.
The second report, âY Ffordd Gymreigâ, examines how a franchising system can work in Wales. While the White Paper advocates franchising on a gross cost basis as used for the London and Manchester models, this report argues that the best way forward for Wales would be to adopt a minimum subsidy model, based primarily on the experience of Jersey.
Jerseyâs franchised bus services began in 2002 using the gross cost model. According to the report, however, there was little incentive for innovation nor opportunity for operators to use their local knowledge and skills to develop networks, ticketing and marketing. This led to stagnation and in an attempt to improve services, Jersey switched to the minimum subsidy approach. They worked with operators to build on the baseline network and drive improvements for passengers, looking to reduce costs with the financial benefit shared between the authority and the operators. The result was a 13% increase in patronage in the first year rising to a 38% increase in year four, an 18% increase in customer satisfaction between 2014 and 2020, and a number of service enhancements and cost savings.
The report argues that this model would be a win/win for Welsh Government as it would have control of the network, fares, vehicle specifications and branding. Operators would then be able to bid against this base network, proposing amendments that could either grow revenue through increasing the number of users or local ticketing offers.
Also addressed in the report are some of the other, key elements of a franchise agreement around fleet ownership, decarbonisation, and advancements in technology. It points out that the proposals are not an attempt to resist change, but merely to start the discussion with Welsh Government and argues in favour of Government and operators working together to build on the vision of a fully franchised, fully state-specified network delivered quickly and cost-effectively.
With the Franchising Bill due to be presented at the Senedd in early 2024 and franchising to be completed in tranches between 2026 and 2030, there is time to give full consideration to these proposals. The concern for passengers, of course, is how to bridge the transition period between now and when franchising starts, an issue highlighted in both reports. While costs are rising, funding for bus services is not. Bus Emergency Funding has now given way to Bus Transition Funding and although this has protected some services, most areas have seen cuts to frequencies or complete service withdrawal.
According to the Llybyr Newydd/Wales Transport Strategy we are moving away from the default position of building new roads and the funding that would have been allocated for this purpose could, instead support improvements in public transport. This will take time, of course, and with Welsh Government recently indicating a funding shortfall of ÂŁ900 million, it could be a bumpy ride for bus users.
Read CPTâs reports in full