Bus reform: one size does not fit all

By Marc Winsland, Principal Consultant (Bus Operations), SYSTRA

Bus reform has become one of the most pressing transport issues for local government, particularly for smaller local authorities. While the national debate is focused on metro mayors and big city networks, the sharpest impact of declining bus services is felt in smaller towns and rural areas.

Since 2010, bus milage outside the major metropolitan areas has fallen by more than 25%, while fares (at least before the £2 fare cap) rose at some of the fastest rates in the country. The result is a vicious cycle of fewer services, higher fares, declining passengers and growing car dependency.

For many smaller authorities fixing buses is not simply a transport issue; it is a matter of local economic opportunity, social inclusion and environmental sustainability.

The good news is that Government is reforming the rules of the game through strengthening Enhanced Partnerships (EPs) and making it easier to create new council-owned bus companies and franchising.

In short, it means that smaller authorities have been given more tools than ever to act.

The challenge will be knowing how to use them effectively.

Bus reform has three main pillars

Firstly, Enhanced Partnerships have been strengthened, giving Councils more power to enforce standards on punctuality, vehicle quality, ticketing and geographical coverage. The new EPs have stronger levers to hold operators to account.

Secondly, franchising has been simplified, there is no more ‘ministerial sign-off’ required by non-mayoral authorities. This means less red tape for smaller authorities to take back control of bus services.

And, lastly municipal bus companies can be set up. Councils can once again own and run their own bus companies, just like in Lothian, Reading and Nottingham, which have successful municipal operators.

What does all this mean?

On paper, it’s a significant expansion of local authority power. In practice however the story is more complicated. Funding still disproportionately favours larger metropolitan areas and the smaller authorities lack the in-house expertise., Furthermore, bus companies are not exactly awash with cash to take on several new franchises all at once. 

Franchising still represents the strongest form of local control. Rather than bus operators deciding what to run on a commercial basis, the local authority specifies the routes, timetables, ticketing and fares. Operators then compete to run services under contract with their performance monitored and the risk of penalties for poor delivery. 

Franchising can deliver better network planning and integration with other modes as well as improved accountability. But franchising is resource-intensive. The tendering process and managing the franchised network require legal, commercial and transport planning expertise that smaller authorities simply don’t have.

The market reality is that smaller authorities worry that bus companies will prioritise more lucrative contracts in Greater Manchester, Merseyside or West Yorkshire, leaving more rural authorities with limited competition and poor value for money. 

And then there’s the issue of geography - many smaller counties inevitably cross local boundaries. Joined up franchising and cross boundary permits exist, but coordinating multiple councils is inevitably complex.

For these reasons, many argue that franchising should be seen as a last resort, not a silver bullet. But that doesn’t mean it should be ruled out for smaller authorities. Another approach could be ‘micro-franchising’, which consists of bringing all of a council’s existing tendered services into a single more coherent franchise and leaving the commercial network to continue under an Enhanced Partnership.

This can provide the same benefits of franchising – consistent branding, simplified fares, integrated timetables – without the full overheads associated with managing an entire network.

Another option is ‘multi-authority franchising’, where neighbouring councils pool resources to create a larger, more viable franchise. The creation of combined authorities through local government reorganisation will make this easier and allow resources and expertise to be shared.

That said, it’s important not to overlook what Enhanced Partnerships can achieve when run well. Many examples exist; Cornwall opted against using its franchising powers, as its EP has successfully boosted patronage and service quality; on the Isle of Wight, bus patronage and milage already exceed pre-Covid levels thanks to its robust EP; and, in the smaller towns and cities of Luton, Portsmouth, Brighton & Hove, Bournemouth-Poole, well-designed EPs have created strong, stable networks.

Collaboration is key

In these areas, collaboration between councils and operators backed by consistent Bus Service Improvement Plan (BSIP) funding has reversed the decline without taking on the administrative burden of franchising.

The biggest barrier for smaller authorities remains money and people. While multi-year BSIPs are a huge step forward, funding allocations are still tilted towards urban areas. Rural services which are more expensive to run due to longer distances and lower demand, often loose out.

The Transport Select Committee has recently recommended weighting BSIP allocations to reflect these challenges. Without that, the risk is that reform creates mini-Londons in big cities while leaving smaller towns and rural areas further behind.  

Resourcing is just as difficult. There are approximately 70 transport authorities in England, but only a tiny pool of franchising experts. If each authority tries to build its own team, smaller councils will simply be outbid. Joint working, shared teams and regional solutions are therefore essential.

Ultimately, the success of bus reform comes down to whether people actually want to use buses. For smaller authorities that means focusing on the fundamentals: frequency and reliability (services that run often and on time); extended hours, including evenings and Sundays; speed and directness (routes that mirror where people drive, not meandering routes); simple integrated ticketing; modern vehicles; and good quality information systems.

For rural areas, bus routes are slowed down by circuitous routes in the name of efficiency, making journey times completely uncompetitive with cars. Smaller feeder services or direct interurban routes supplemented by dedicated village shuttle buses can work far better.

Bus reform offers smaller authorities a real chance to reverse patronage decline, but only if approached pragmatically. Franchising must be weighed against cost, resources and geography. Enhanced Partnerships remain a powerful tool and should not be underestimated. The risk is that reform simply deepens the divide between the “mini-Londons” of Manchester and Liverpool and the smaller towns around them. But with smart use of BSIP funding, creative approaches like micro-franchising and collaboration across borders, smaller authorities can carve out a sustainable model that works for them.

By 2030 we could see stronger more reliable services that are commercially viable and socially necessary, not just in our biggest cities but across England’s smaller towns and rural heartlands.

Practical steps for smaller authorities

• Test your EP first: consider franchising is your network vision cannot be delivered through a new and improved, strengthened EP.

• Explore micro-franchising: start with tendered services as a manageable first step.

• Collaborate regionally: work with neighbouring authorities to share expertise and attract stronger operator bids.

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Find out more on the SYSTRA website