Bus and garages sell-out

[Nortube]

In the article and comments on LondonReconnections [ here ] it states that First Group is selling off its London Bus side - some to Metroline, the rest to Transit Systems Group.

Apparently Metroline is owned by a  Singapore company and Transit Systems Group is Australian. RATP (the Paris equivalent of TfL) also run some of London buses. Is there any company running anything that is actually British anymore?

[Ben]

One word: Thatcher.

[keithys]

If there was a like for a comment the person above would have got one from me.

The state of play with Londons buses is the same as it is with Londons railways.

Arriva owned by the Nationalised German Rail Company DB.

Abellio owned by the Dutch Railway Company Nederlandss Spoorwegen.

Metrloline owned by Comfort Delgro a leasin company in Singapore.

Stagecoach is the only company owned and run by a British concern..

[Nortube]

I've never tried it, but I think the 'thumbs up' icon next to the edit button on the post is the 'like' button

[railtechnician]

Apr 11, 2013 17:10:11 GMT Ben said:

One word: Thatcher.

Sorry but you're wrong on that one!

She created a competitive environment but that has been mismanaged by her successors.

[railtechnician]

Apr 11, 2013 17:10:11 GMT Ben said:

One word: Thatcher.

[roydoncrossing]

Apr 13, 2013 16:43:49 GMT keithys said:

If there was a like for a comment the person above would have got one from me.

The state of play with Londons buses is the same as it is with Londons railways.

Arriva owned by the Nationalised German Rail Company DB.

Abellio owned by the Dutch Railway Company Nederlandss Spoorwegen.

Metrloline owned by Comfort Delgro a leasin company in Singapore.

Stagecoach is the only company owned and run by a British concern..

[roydoncrossing]

Come 2015 and a possible yes vote to Scottish devolution and Stagecoach and First will also be foreign companies!

[roydoncrossing]

Thatcher stood down in 1990 and the privatisation of London buses did not take place intil 1994 although it had been split into separating operating areas earlier

[thestig]

Bus deregulation was definitely on Thatchers watch and while the large scale privatisation of London buses didn't end until after she left as the first route was tendered around 1985, it was very much a done deal. Something Thatcher often gets mistakenly blamed for was railway privatisation although reports suggest she did finally succumb to the idea before Major took office.

I can't help but wonder if Prime Minister Boris will continue and we will see The Tube going more private than it is.

[railtechnician]

Apr 28, 2013 18:17:21 GMT thestig said:

Bus deregulation was definitely on Thatchers watch and while the large scale privatisation of London buses didn't end until after she left as the first route was tendered around 1985, it was very much a done deal. Something Thatcher often gets mistakenly blamed for was railway privatisation although reports suggest she did finally succumb to the idea before Major took office.

I can't help but wonder if Prime Minister Boris will continue and we will see The Tube going more private than it is.

In my view there was nothing wrong with the concept of choice although I'll never be convinced that applying it to the nationalised bus industry was a good idea. A few made a 'fast buck' but the big losers were in the end the taxpayers and the passengers. The trouble with all nationalised industries was inefficiency through custom and practice, on the other hand privatisation has led to no real choice at all after the dust has settled. The governments involved in the privatisations failed to ensure proper checks and balances and thus we now live in a country which is bankrupt in all but name with all services and utilities being cash cows for their owners but in many respects worse than what they replaced.
London must be seen as a special case as far as transport is concerned, Londoners are spoiled for choice while many areas of the country have few if any choices. London Council tax payers and travellers are paying through the nose for what appear to be better than ever bus services but there is a ceiling above which more services cannot be provided without some other initiative. The tube will always be a victim of its own success and unless capacity can be greatly increased in the next decades another way will need to be found to move Londoners around.

In my view one option would be to ban the owning and usage of private cars within a 10 mile radius of Charing Cross opening up the roads to more buses. Another possibility is to get more people working from home, that would allow existing services to continue to cope with a rising population and an ever expanding conurbation. Other possibilities are to get companies to move out of central London altogether, decamping to Essex, Surrey, Kent, Buckinghamshire and Hertfordshire where many London workers commute from leaving the capital as a tourist attraction, communications and transport hub and getting Londoners to be the commuters to surrounding counties relieving pressure on the City and West End.

To be honest there are more advantages to running London down than to keep throwing money at a problem that cannot be solved without some radical and drastic action, proper planning for the long term would be a good start but we live in a country where short termism seems to be the MO of all politicians and similarly investors are always looking for a quick return on investments.  

[Ben]

RT, I must humbly stick to disagreeing with your previous post on this.  However, I think we've converged onto your more recent one...

I've heard it said before, somewhere, that Nicholas Ridley's vision of bus privatisation and deregulation was one of driver-ownership, with a myriad of independents, providing a healthy level of competition and innovation.
If this is true, and it is legitimate to compare how a system matures to how its initial justification, then surely the bus scene is one of abject failure? It seems to me, someone born after the direction of privatisation has been set in stone for 'public' services, that actually the benefits of what real competition can bring were never sufficiently enforced in any industry sold off, with the result now that in any formerly tax-payer owned industry, the nomenclature 'big three', 'big four', 'big five', 'big six', etc., is depressingly universal. One must question then whether the goal of competition was ever actually the true aim of privatisation, or whether it was merely a convenient cover story for a quick money grab, and a lazy adherence to small-state ideology.
The most famous example of a network wide system of driver-ownership was probably Malta. And look at how that ended; a sea of aquamarine.
In the uk, localised monopolies are widespread. Even the transport committee recognised the lack of competition: www.publications.parliament.uk/pa/cm201213/cmselect/cmtran/10/1005.htm ! And let’s not forget the 'bus wars' that characterised the early period of deregulation. A competitive environment is surely one where competition and innovation are encouraged and fostered by the markets own requirements and structure? I don't see how that can be said to have happened with the buses, especially outside of London, because large companies have accrued the power to determine what minimum level of return they consider themselves worthy of without needing to cede the opportunity (which goes with geographic dominance) to run services to others who might wish to. The larger the company and the more cemented the stranglehold they have the less willing or able they are to be innovative as well. So you have this situation now where vast swathes of the public transport network necessary from a social cost perspective being are propped up by councils through subsidies at evenings and weekends, without the more profitable routes being used to cross subside either through direct financial means, or through more lateral means such a loss making section being bolted on to a profit making section.

Indeed to get back to the original post, just look at First's garage-yard 'Garage and Yard' sale ( ) :
“The sale of these operations marks further progress in our programme to reposition our UK Bus portfolio, recover performance and equip the business to achieve sustainable revenue and patronage growth. Our strategy is to focus on those areas of the country which offer the greatest potential and while we have been a key operator in London for many years, our focus going forward is on the deregulated market outside of the capital." - Giles Fearnley, First’s Managing Director UK Bus
What is it then that makes the regulated London scene less appealing to a profit driven business than the deregulated scene outside of London? It can't be the fact that a profit is unable to be derived by the operators in London, for whilst the network is subsidised overall, bus companies still make some money from bidding and running tendered routes. They talk of wanting to "achieve sustainable revenue and patronage growth", but surely London is in a better position than most areas of the country to promote and encourage public transport use, and indeed guarantee revenue (its bonds constantly being in strong demand). The benefit, then, of working outside of London must be in the additional flexibility allowed to operators. This includes being able to set fares, and recast timetables and services with only 56 days’ notice. However, these two things are not attractive or conductive to passengers themselves, who surely would like the comfort of knowing that their services can be expected to be reasonably stable in terms of route and timing, and that the fare for a given journey will also remain reasonable and stable.

What really surprises me is that the Thatcher governments flawed ideological vision of how things should work is questioned so little, when its fundamental failures are so brazen they are difficult to ignore. The country has experienced massive increases in car ownership and massive decreases in bus ridership since deregulation, along with constant fare hikes, large subsidy increases to the system as a whole, and a far more intermittent coverage of the land.

If you want positive competition, then you must enforce equal chances for everyone, or put in a different way, ensure that nobody has a greater ability to disadvantage or remove a chance from somebody else. We don't have that, and as a result the industry has naturally evolved into something of a cartel, with the big player being able to call the shot over the amount of profit they want to make.

----------

In way of example of all the above, I posit a hypothetical situation outside of London. A small town has one busy route running through the middle of it. The town is in the middle of a locally monopolising, yet nationally present, large bus company, though a few small independents do exist. The busy route runs with a small but reliable profit over the entire week with its most busy periods being peak and shopping hours M-F, outside these times the route runs at a small loss. The costs of the route pale into insignificance compared to the turnover of the large bus company.
Eventually the large bus company desires to increase profits, so it cuts the early morning, evening, and weekend services. However, being socially necessary, the council then subsidises them. Later on, the bus company decides that the whole route doesn't present enough profit to fit in their portfolio, so they drop it totally, but still maintain a local monopoly outside the town. An independent steps in and provides the service. The large bus company re-enters the scene for other reasons, abstracting passengers from part of the route as a side effect. The route now only just breaks even during the weekdays, and eventually the independent pulls out as well after bouts of service trimming followed by lower custom. Subsidy kicks in, and a shortened route goes out to tender during the week. The big company wins the tender with the lowest bid.

Without a system of route regulation, it can become impossible (unintentionally or otherwise) to maintain any level of competition because the financial security of any route can be undermined.  I've read in documents from groups like the 'Libertarians Alliance' that the subsidy is unnecessary and perhaps even uncompetitive.  In the situation above, without a subsidy there would not be enough income to cover a partial route's existance, yet the route as a whole would not be viable either as enough custom has been abstracted to a different route.  So who wins?  Not the taxpayer, who must now subsidise a previously profitable route without all the travel options that the full length of the route offered.  Not the former fare payer, some of whome now have a broken journey.

Apologies if any of this is unbelievable!

[railtechnician]

Ben, I like your further comment, we have reached similar conclusions from different origins. The bus deregulation and privatisation of the 1980s left London's bus services to become initially much the same as what existed before the formation of LPTB in 1933. I am old enough to have personally known some of those passengers around in the days General, Admiral, Tilling, others and the 'pirates' between WW1 and 1933. Having been a bus enthusiast as a young lad the experiences of ordinary Londoners in those years were related to me by people I knew and while the 1980s privatisation did not lead to visible and obvious cuthroat tactics I have no doubt that they were in use throughout the land just as they had been 50 years earlier. History should have taught the government of the day and its successors that bus derugulation would not achieve the desired results without regulations! Of course in the modern era we have not only regional and national corporations but also international corporations and what I have always seen as very weak monopolies and mergers controls. It is reprehensible that so much of what was once British has been allowed to be bought up by foreign companies but that it seems is the price for poor governance, militant self destructive unionism and a large proportion of the working age population being too lazy to go and earn a living over several decades.

[deansullivan]

To pick up on these good points – perhaps I should add my thoughts.

There is a significant difference between deregulation and privatisation.

The first stage of the privatisation process was to deregulate coach services, followed a couple of years later by bus services. Under deregulation anyone with an operator’s licence could register new or competing routes. As a result there was without a doubt some fairly vicious bus wars. But one lesson that quickly dawned on operators was the importance of the customer. The customer paid the fares, which in turn helps pays the bills. Without revenue there is no business.

As a result many introduced innovative liveries and bold logos designed to lure people back to buses. Perhaps for the first time the industry had started thinking about the customer rather, than trying to deliver a service which was operationally beneficial to the bus company.

Once the majority of the Country had achieved deregulation, the government then set about selling the various components of the National Bus company. This we all know as privatisation. I seem to recall a few municipals went at the same time. Brighton & Hove springs to mind. However some municipals did survive for many years.
London was due to be deregulated, but due to concerns over the potential for significant bus wars on busy routes and the loss of services on less remunerative routes, the idea was politely shelved. Nonetheless in preparation, London Buses created a number of smaller operating units. The names of some of those exist today, but others like Wandle & Forest District do not. However London Buses did take advantage of new freedoms outside the Capital by introducing what we now consider as Commercial routes. These included the 310A from Enfield to Hertford, and the X99 between Harlow & Basildon. Sadly the X99 was to be short lived, but the 310A did last for many years.

In the meantime London Buses set about tendering services. From recollection the services tendered were pretty small routes on the periphery of London. The 146 Downe – Bromley was one such route, being awarded to an independent operator (Crystals of Orpington). Originally services not subject to tendering were continued on the basis of a block grant, but gradually as the momentum built up more and more services were tendered. The nationalised London bus operators suffered heavy losses in the initial stage. Some of the biggest wins going to independents like Ensign Buses, Metrobus of Orpington and so on. At the same time operators outside of London took advantage of their new found freedoms and made significant headway into London. Eastern National, Boroline, London & Country spring to mind as good examples of this.

However in the absence of deregulation in London, the then Government set about selling the smaller bus units. In some cases these were bought as management buyouts (Centre West & Metroline to name just two). Others were snapped up by Stagecoach, Go-Ahead, MTL and so on.
Of course over the last two decades there has been a significant settling down of the market which has led the casual observer to think that competition has all but died out. In truth is has perhaps in some cases, but the real reason for this is the difficulty operators face in gaining reasonable returns for their efforts.
The problem is that national Government have over the years piled more and more cost on bus operators, while at the same time decreasing vital subsidies that we need to maintain these services. Most bus operators work on margins of between 5 & 15% profit on turn over. A staggeringly small amount of money when you consider the risks involved. Buses are seen as (and are) vital public services, but when push comes to shove and local authorities can no longer financially support bus services, the blame is often placed at the foot of the local operator. Even better if it seems to be one of the big groups!

What I think we have now is by and large bus operators which operate for the public benefit and who do care about passengers. There’s more independent bus operators than before deregulation. Before dereg, you had to make a case for any new route to the Local Traffic Commissioner. Routes would not be authorised unless you could prove you would not abstract passengers from other nationalised bus services. As a result very few actually existed. You could argue that innovation was stifled.

Since running Sullivan Buses I have met may people who care about the services they operate and are positive about the industry. But there’s always going to be conflicts. Is it better to have a have a large group with local identity’s or a large group with one national identity? The answer very much varies depending upon who you talk too. But what is clear is the level of enthusiasm that exists in this industry.

What we do have to do, is operate at a profit. Without a reasonable return, we cannot invest in our services or even pay the bills. The old municipal’s and NBC were perhaps freed from this to a certain extent as if they went over budget the tax payer would merrily bail them out.

Lastly people often look back to the 1970s and beyond as an example of how good public transport was. In fact it was anything but. Shabby buses, under-investment, routes operated out of convenience or political expedience for the local authority (who were happy to support vanity projects in marginal constituencies (the later still goes on today!)).

Perhaps the 70s was summed up by the one size fits all National Bus Company and the god awful all-encompassing Leyland National. And that of continuing passenger decline as people flocked to the motor car.

[Weak Field]

Following up the opening post on this thread.

The sale by First of it's London operation excluded Dagenham depot, no takers, as most of its routes are lost from September/October to Stagecoach. The balance of its TfL routes will now pass to Go-Ahead (Blue Triangle)on 21st June, the Rail Replacement Department and Vehicle Repair Centre will close on 21st June (The last First London Rail job was worked on 9th June (Northfields to Hammersmith)). Dagenham depot closes its doors when route 179 passes to Stagecoach, planned for early October.