Bus franchising to cost Greater Manchester £134m

Greater Manchester is to push ahead with taking control of the region’s bus network in a groundbreaking move that is set to cost more than £134 million.

At an extraordinary meeting of the Greater Manchester Combined Authority on October 7, leaders are expected to sign off on a first of its kind public consultation into bus franchising.

It’s a plan long dreamed of by Labour politicians as the pinnacle of devolution, but it puts them head to head with private bus companies who have previously hinted they are prepared to launch opposing legal action.

Re-regulating the region’s buses will see a ‘better deal’ for passengers with the implementation of a ‘London style’ service over the next five years, said deputy mayor Sir Richard Leese.

Greater Manchester would coordinate the bus network and contract bus companies to run the services, with any profit being reinvested back into the buses.

Sir Richard added that residents would benefit from more routes, integrated services and capped fares.

It would be the first region to bring back regulation since Margaret Thatcher privatised all bus networks outside of the capital in 1986.

Currently the funding is being budgeted locally, although Mayor Andy Burnham is reported to have engaged in ‘positive’ talks with PM Boris Johnson and transport secretary Grant Shapps about government contributions.

However it is likely that private bus companies will strongly oppose the plans, as Stagecoach, along with all other 15 bus firms has previously condemned the move towards franchising.

Sir Richard said: “One of the things that bus companies have said previously was that franchising was going to cost a small fortune, and yes it’s going to be expensive to implement but nothing like the cost they were predicting. 

“It will be a more effective way of doing things that ought to make it easier and have more routes for residents. 

“I am very excited about this – I have been campaigning for a regulated, integrated public network for as long as I can remember.

“It will give passengers a far, far better deal and it’s really important for the economy of Greater Manchester, and for the environment.

“And it will help us get far more people out of private cars and into higher quality public transport.”

An independent audit has now been completed which concluded that the combined authority and Transport for Greater Manchester could afford to finance the plans.

The cost of transitioning to a regulated service, from now until 2024/25, is estimated at £134.5m.

It would see the lion’s share of funding – £78m – coming from the ‘earn back’ funding Greater Manchester gets from government under the devolution deal.

A further £11m is already accounted for from this year’s mayoral precept rise, and £5m more is expected to be brought in through business rates.

But each of the ten local authorities will have to contribute a one-off payment totalling £17.8m – around £1.7m each if split equally across the boroughs.

This leaves £22.7m of funding yet to be found.

Officers say it could be raised through a further increase in the mayoral precept, adding up to a £18.20 rise for ‘average’ residents over the five years, or £14.20 for Band B.

“That is the one off costs of moving to a new system and at the end of that we end up with a system that in my opinion will give us far more for the same amount of money,” Sir Richard added.

“When we get to the detailed budget there will be a choice for the combined authority, whether it is an increase in the precept or whether it’s found in the existing precept by re-allocating resources.

“But it would be a damn sight better if we got some government support as well, and government should support it.”

He added that the local authorities’ contribution for the transition costs would be funded by retained business rates.

“Are councils going to have to put their council tax up to pay for that amount? The answer is no.”

If successful, the current plan is to roll out the changes to the network in three stages. 

The Greater Manchester region would be split into thirds, and franchising would be phased across each section.

If approved, the public consultation will start on October 14 and run through to January 8.

 

Image by David Dixon

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