The Bus Services Act 2017

Bus iStock 000003775433XSmall 146x219Rob Hann looks at major changes in the bus industry following the introduction of new legislation.

When I was a law undergraduate at Nottingham Trent University in the 1980s we had what we students regarded as a rather eccentric law lecturer who had a very keen interest in Nottingham’s buses. In his spare time and days off he would often be spotted at the central bus station, stop watch and clip-board in hand checking to ensure the buses were running to time and were departing correctly for their various destinations. Now, after spending most of my career helping local authorities to deliver major complex projects I too find myself developing a keen interest in the bus industry courtesy of my current role at Transport for Greater Manchester (‘TfGM’). The first Act of Parliament dealing specifically with regulation of the bus industry in nearly a decade has recently received the Royal Assent. The aim of the new Act is to drive up bus use, help cut congestion and deliver economic growth through facilitating better public transport usage.

Amongst the smorgasbord of new powers contained in the 2017 Act is the ability for councils to work in partnership with bus operating companies (the likes of First Bus, Arriva and Stagecoach for example) to improve journeys for passengers, and bring in new technology such as smart ticketing across all forms of public transport and including on-board Wi-Fi. Many bus services have already introduced some of these systems in some regions. Where I live in Nottingham we have had the Robin Hood card for several years which facilitates both tram and bus travel across Greater Nottinghamshire through the use of a pre-paid card. Pre-payment of fares helps to make bus travel much more efficient than cash payment to drivers and the aspiration of most operators and transport authorities alike will be to do away with on-board payment entirely (as London has done).

Indeed, the use of modern technology to help make bus fleets much more accessible to potential users is expected to increase bus usage, reduce congestion on the roads and make data about fares, timetables and routes more openly available through apps that tell passengers when the next service will turn up.

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There are also new powers to facilitate so called ‘enhanced partnerships’ between the public bodies responsible for public transport and the various private sector run bus operators under the new law. Partnerships between operators and councils are not exactly new and some of the technological changes made to date (such as those mentioned above) can be put down to good working relationships by and between those running and operating existing bus networks.

The really interesting bit of the new legislation, concerns the ability for some public transport bodies to explore new ways of organising their local bus services network. The local bus market in England was deregulated under the Thatcher Government of the 1980s. This involved most local authorities being forced to sell off their municipal bus companies and opening up the market to commercial operators. A few authorities (Nottingham City Council being one) managed to hang onto their bus companies but most have long since been assimilated into private sector bus fleets. Ever since, the great sell off of municipal bus enterprises and deregulation there has been ongoing debate about whether the so called ‘free market’ has delivered more and better bus services in local areas. Bus services across England are served by a market which comprises a few very large bus operators who are largely free to choose what services they run, what buses they use and how much they charge. Fare box ‘risk’ (the fares collected for usage) is taken by operators but with non-viable routes also being subsidised through grants from councils and transport. Grant funding and subsidised services though are under significant pressure as local government struggles with a multitude of other statutory responsibilities in times of widespread and prolonged austerity.

Consequently, radical new options for bus network delivery are being actively considered following the introduction of the new Act. Franchising (the contracting out of routes to private sector operators) is based on the model for providing bus services in London, which are procured by Transport for London. Under a franchise model, the appropriate authority determines and specifies the bus services to be provided in an area, and bus operators bid to provide those services. This system and process is similar to what happens in the rail sector, where national government specifies most services and commercial operators run them.

In England, regions which have an elected mayor (such as Greater Manchester) will get the power to operate a bus franchising network, where they think it is appropriate, following a public and industry (including current service providers) consultation process. Under a franchise approach, the authority would have a greater say than it has now over what bus services should be run in their area and what standards it would expect to see from the bus fleet (e.g. green fuel bus fleets etc), in a similar way to London. There are many ways in which franchised routes could be organised. For example, one option might be to seek to split the network into smaller routes in order to attract new industry players. Regular competition between a wider range of bus operators should help drive down costs and fares, whilst at the same time improving standards and comfort for passengers. At least that’s the theory.

Other councils, which do not have an elected mayor, will also be able to operate a franchise network subject to consultation and provided they get permission from the Transport Secretary. Private bus operators will continue to provide services but they will compete on a more regular basis for available contracts in franchise areas. Local authorities remain prohibited from setting up new public sector bus companies to compete in the market alongside private bus operators under section 22 of the 2017 Act, despite the success of the few pre-existing municipal bus undertakings which remain in public ownership (e.g. Nottingham City Bus).

So, in future, that old adage that ‘you wait ages for a bus and then four come along together!’, should be heard no more at bus stops, whether it be by virtue of new and improved technology, smart ticketing and timetabling, enhanced partnerships between operators and transport bodies and/or greater control and planning over routes and the network via a fully franchised network.

Now - where did I put that clip board and stop-watch?

Rob is a freelance writer, solicitor and consultant currently working for Transport for Greater Manchester assisting with major projects and programmes. Rob is also the author of Local Authority Companies and Partnerships and a Guide to Local Authority Charging and Trading powers 2017 –contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.

© Rob Hann May 2017