The OneBus organisation has been opposing franchising in Greater Manchester and fighting to make the region’s Mayor and authorities recognise the benefits of partnership in its place. OneBus CEO, Gary Nolan, speaks to James Day about the work it has done and its next steps now franchising is firmly on the agenda
On Monday 24 June, 2019, Greater Manchester Mayor Andy Burnham announced that he would be seeking to implement franchising in the region’s bus network, following the recommendation of an assessment into its bus services.
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Opposing this decision is OneBus, an organisation made up of the vast majority of Greater Manchester’s commercial bus operators. Since the Bus Services Act of 2017 and the news that the city is investigating franchising in the bus market, the organisation has been pushing for a bus partnership, which it said could deliver an improved network much more quickly and with less financial cost and risk. Its Chief Executive is Gary Nolan.
Gary took up his current role at OneBus after a long career in the bus industry. He started in 1978 as a bus conductor, before becoming a driver in Rotherham.
“I progressed through various roles, such as inspector, senior traffic officer and a few management roles, before becoming an Operations Director at Stagecoach East Midlands in 1996,” he explained.
When First acquired Mainline, Gary left Stagecoach and became General Manager and eventually Managing Director. He left First in 2006 to go back to Stagecoach as Managing Director for Lincolnshire Roadcar, which then subsumed part of the Stagecoach East Midlands business to make it a larger company.
In 2013, Gary was promoted to Regional Director North, and in 2015, Regional Director for the Midlands. After a structural change saw the removal of Regional Directors, he took redundancy and left the company.
Gary said he enjoys his current role, which has become increasingly busy: “I’m not employed by GMBOA – I’m self-employed on a contract. I’m supposed to work six-eight days per calendar month, but recently it has been at least 10!”
Stronger together
OneBus was incorporated as a company in April 2008 as the Greater Manchester Bus Operators Association (GMBOA). It was primarily created to represent bus companies in the city in discussions with the Greater Manchester PTE (now Transport for Greater Manchester (TfGM)) and key stakeholders. It began its life with two members – Arriva North West and Greater Manchester Buses South (Stagecoach Manchester). Since then, the membership has grown considerably.
Following the announcement that TfGM and Greater Manchester Mayor Andy Burnham were to investigate franchising, Gary Nolan was appointed as Chief Executive of the organisation in October 2017. His primary aim was to negotiate a partnership alternative to franchising.
“We thought the GMBOA acronym was a bit of a mouthful, so we relaunched in July 2018 as OneBus,” he said.
While the size of OneBus’ membership is considerably larger than in April 2008, the organisation prefers to state the commercial mileage it represents in the city instead of the number of operators which form it. Currently, around 95% of commercial mileage in Greater Manchester is undertaken by OneBus members.
“Some people claim we only look after the ‘big boys’ like Stagecoach, First and Arriva, but that isn’t true,” Gary stated. “We have members like Jim Stones Coaches, Transdev, Bullocks, High Peak Buses, D&G and Warrington’s Own Buses.”
Operators’ partnership proposals
When OneBus made the case for a bus partnership in Manchester, its pitch set out what the mayor and TfGM were looking for as part of their strategy and showed OneBus could deliver all of it through partnership.
“The main goal was to achieve those aims without any impact on the public purse, and sooner than could be delivered through franchising,” Gary said.
The OneBus proposal concentrated on five key areas. The first consideration was the network: “We proposed to discuss with TfGM where they considered there to be deficiencies in the network and how operators would fill these on a commercial basis, saving TfGM subsidy.
“We offered evening and Sunday frequency guarantees on normal daytime high frequency services.”
OneBus also said it would commit to exploring how integration with tram or rail might be improved.
The second key area was simplified and integrated fares. “One of the criticisms we are receiving is that there are too many tickets and variations,” Gary said. “We agreed we would simplify the range and promote more effectively the multi-operator ticket which exists.”
OneBus partners also committed to simplifying off-bus retail options and working with the mayor to deliver a ‘ground-breaking scheme’ offering free travel to 16 to 18-year-olds, the costs of which would be met by the combined authority.
On the topic of customer experience – the third area – Gary said: “We proposed there would be one point of contact and one brand, with all buses carrying the same livery, with some necessary operator identification.”
The proposal suggested advance and real-time information would be made available by operators across the network at all times, with TfGM reviewing its roadside infrastructure in return.
“On air quality, infrastructure and technology, we offered 150 low-emission buses per year over the next three years,” Gary continued. “We didn’t guarantee zero emission, because at the time there were no real tried and market-tested available vehicles. We’re sticking with low-emission until a suitable zero-emission vehicle becomes available. Manchester is predominantly double-deck, and we’re struggling to find a viable electric double-decker at the moment.
“That commitment represented an investment of £100m over three years. Retrofitting and interior renovations were also included as part of our investment intentions, along with a commitment to a minimum standard of on-bus technology including WiFi, telematics and automatic vehicle location.”
The congestion problem
The last area OneBus highlighted was congestion: “We have a plan that would prioritise congestion hotspots, work with TfGM to identify interventions to relieve them and improve bus journey times. This would be TfGM’s side of the partnership.
“I was asked on the radio how we would fund what we are offering. The answer is that if we got savings through less congested routes, we could save peak vehicles which could then be introduced to provide other services. We essentially told TfGM if they sorted the congestion out, we could make savings which we would reinvest into providing better bus services.”
However, Gary was dismayed when the franchising announcement made no mention of congestion, and he said until it is sorted, there will be no benefit whatsoever no matter what changes are made to how the bus network is run.
Jumping the gun
Gary explained that discussions OneBus has held have become increasingly detailed as the organisation has put ‘more meat on the bone.’ “We’ve had lots of meetings with TfGM which latterly have been very positive,” he said.
“We split down into working groups to develop each of our areas in more detail. We want to formulate a voluntary partnership agreement which would be legally binding.”
The meetings actually progressed far enough to include legal representatives from TfGM and the operators. “We have got to the point where the bones of our proposal are being written up as a formal document,” Gary noted.
“We have legal teams from both sides having an input into it.
“That work is not yet completed, so we’re surprised that the announcement to recommend franchising has been made. We believe it has been made prematurely.
“In the paper going to the Combined Authority recommending franchising, it admits that partnership discussions are ongoing, yet there is a recommendation to go with franchising. The investigation into all the options is not finished, but the decision has been made anyway.
“Our main point is there is no detail about how much it is going to cost and no detail about the timescales of introducing it. Therefore, what happens in the interim? Bus passengers deserve better.”
The funding issue
Gary continued: “When the 2017 Bus Services Act went through, it stated that there would be no additional money no matter which way authorities chose to go. Quite rightly, Andy Burnham is questioning why the south has been receiving a lot more public funding than the north, but he is banking on getting more money to implement franchising. We don’t know how much, because we don’t know how much it’s going to cost. There’s been no statement.
“One of the figures we’ve seen quoted estimated that franchising will cost about £60m per year. This was published in a Combined Authority paper. Currently, supported bus services in Greater Manchester receive a subsidy of £27m per year.
“I suspect that the £60m figure is optimistic on revenue and pessimistic on cost. The real cost may be much higher.
“This is all about the Northern Powerhouse. It’s an attempt to try to lever adequate funding from central Government to cover a lot of the schemes which the north requires. I’m not sure where bus reform will be on that list, but I suspect the view will be that there are far bigger fish to fry. There’s a rail network at capacity, tram extensions on the way and so on.”
Gary highlighted the extent to which buses are underfunded in Manchester: “In the last year, Greater Manchester has spent £500m on cycling, £72m on 27 new trams and just £1m on buses, which will go towards bus stations and interchanges. There has been around £20m spent investigating bus reform, however.
“The local authority does not want to put money toward the bus sector because they view it as lining shareholders’ pockets. They’re happy to spend so much on cycling and Metrolink because they own them and view them as being for the benefit of the public. They think buses are for the benefit of shareholders and any investment in them would only maximise shareholder benefits. Even if that was true, people forget that pensions are invested in companies that make a profit, which pension schemes get dividends from.”
Operator profit
“The profit from operators in Manchester is earned in a competitive environment,” Gary said. “Under a franchise, an operator bids for a contract and builds profit into that bid. That profit will then be guaranteed.
“Today, an operator has to earn that profit through maximising revenue or reducing costs, and it can vary. We’re going from a situation where people are concerned about operators making profits, to one where the public purse will directly give bus operators a profit. Where’s the logic in that?
“Under a franchise situation, a bus operator isn’t going to do it for nothing. The only way they can get profit is by charging more for the contract.”
With this in mind, I asked why operators were not keen on the franchising model.
“Some operators are keen on it,” Gary replied. “I suppose that’s because of the guarantee – if you do the job right, you’re guaranteed the revenue. But you’ve got to win the contract first.
“Under franchising, there is competition for the market rather than in the market. This has a downside – once an operator has won a contract, the competition ends.”
Perhaps the biggest reason why operators dislike the approach in Manchester is the potential confiscation of their businesses, with no guarantee they will be successful in gaining contracts in the new market.
Gary explained: “Stagecoach Manchester and First Manchester were bought from the Council and good money was paid for those companies, but they could be taken back without any compensation. Stagecoach and other bus businesses have all been invested in and built up.
“TfGM gave us one presentation about the size of packages and contracts and how contracts might be allocated to depots. The implication was that they couldn’t give an existing operator an advantage. Under franchising, it’s likely they would compulsory purchase all the existing bus depots and use those as part of the contract, so no operator had an advantage.
“This is different to London. In London, operators have to find an operating base or lease it from TfL.
“The key thing is, they won’t tell us anything until it goes to public consultation. We as members of the public will have the chance to respond.”
Public scepticism
While Gary believes the mayor and TfGM will take the franchising route, he said there’s still a chance to convince them to take a different path.
“I’d like to think there is time for them to consider partnership, having appreciated the cost of franchising and the amount of time it’s going to take,” he said. “There will be resistance to the use of increased taxes to pay for it.
“Assuming the £60m cost is accurate, it would be equivalent to £60 a year per household in additional council tax. This tax will be paid by people who may never need to use the bus.
“In the little detail we have seen of the franchising plan, we can’t see much that will incentivise people to switch to the bus. Buses will still be unreliable unless something is done about congestion. You can encourage people to interchange, but you can’t force them. However, the plan looks to be trying to force people to use an alternative mode so there is no overlap.”
Gary highlighted a radio interview he was a part of the morning after the announcement: “The interviewer on the radio said it’s a bit like jumping out of the frying pan into the fire. What we have now might not be right, but going to the other extreme might be even worse. What we should be looking at is somewhere in the middle. Let’s see what the problems are and try to address them together.
“It was also interesting to hear bus passengers interviewed on the radio who didn’t see buses being a problem. They understood buses are not reliable, but accepted that is down to congestion. They also accepted that fares might be expensive, but didn’t see that changing post-franchising. They also had concerns about the council running the buses again, which they thought would lead to services being cut.”
The lack of interest in or understanding of the bus industry’s point of view from local councillors and authorities has been frustrating however, as Gary pointed out: “We keep getting hit with statements about the network not being right, or being deficient. We keep saying tell us where the gaps are, but they won’t do that.
“We produced a brochure introducing OneBus and explaining what we were working on, and a follow-up which set out the key features of franchising, TfGM’s plan for 2040 and how the partnership we proposed could deliver all of it. We sent that to every local councillor and didn’t get a single response.”
Future plans
With the formal partnership discussions still ongoing, despite the recommendation from the authorities to pursue franchising, the next step for Gary is to see them through to their conclusion and push that as being an alternative.
“We await our turn to have a look at the proposal as members of the public,” he said. “We’ll decide our response once we’ve seen the proposals. They have a legal process to follow and we have to wait until the process is almost complete before we can intervene.”
