http://www.route-one.net/industry/devolution-the-end-of-the-world-as-we-know-it/If the announcement that a Buses Bill formed part of the government^s devolution agenda was a surprise, that^s nothing compared with last week^s double-whammy. Mike Morgan reports on the shock news that all buses in Cornwall are to be franchised.
Although it was expected that the Greater Manchester combined authority was to be first in line to be granted devolved powers that include control of public transport, the announcement that Cornwall, a unitary authority, is to be first has sent shock waves throughout the bus industry.
What^s more, the House of Lords has well and truly set the franchising cat among the bus operating pigeons by passing an amendment to The Cities and Local Government Devolution Bill, which is currently passing through Parliament and puts in place the legal framework across the country that will make it simpler for devolving more powers to more places.
In the unlikely event of the amendment being approved by the House of Commons, it will remove the requirement for a directly elected mayor as a condition of extensive powers, including control of bus services.
The Cities and Local Government Devolution Bill also sets out far reaching powers to be devolved to Greater Manchester and for creating a city-wide elected metro mayor who will provide strong leadership and a clear vision.
Meanwhile Cornwall has leapfrogged Sheffield and Leeds, which are in talks for similar deals. They and many other cities remain reluctant to accept the government^s demand for an elected mayor in return for powers.
These latest moves come hot on the heels of earlier worrying developments.
The bus industry was already facing the uncertainty of a yet to be defined Buses Bill, an unexpected development revealed in the Chancellor^s Budget Speech.
These fast moving developments are all the more surprising because there was little more than a veiled warning in the run-up to the general election in May. What^s more, the complete lack of information to the contrary had led to the assumption that franchising was a Labour party policy, not one that would be adopted by the newly-elected Conservative government.
This same lack of clarity extends to the Buses Bill, though industry commentators have assumed that franchising of local bus services would be at its core.
As a result the bus industry was gearing up to meet this unexpected challenge by strengthening its definition of partnerships as part of a robust defence of the status quo.
Although the industry is steadfastly wedded to the concept of partnership, the emphasis had rapidly moved in response to the new political reality. No longer was it simply a case of new buses and bus lanes. Instead the industry was increasingly presenting its case for using its expertise to help severely cash-strapped authorities deliver the holy grail of integrated public transport and smart ticketing.
New threat
Announced last Thursday (16 July) by the Department for Communities and Local Government, the deal that makes Cornwall the first county to gain ^historic^ new powers under the Government^s devolution agenda, hands over control of bus services, adult skills and regional investment.
Under the deal, Cornwall Council will take over responsibility for franchising bus services by 2018, making it the first rural unitary authority to gain this power, and as in Manchester health and social services will also be brought together.
The council will have intermediate body status under the European Regional Development Fund and European Social Fund, which will allow it to select projects from April 2016.
The announcement should help the Conservatives consolidate their grip on local politics in the peninsula after the party^s clean sweep of the six Cornish seats in May^s general election.
Prime Minister David Cameron said: ^At the heart of this one nation government is the belief that everyone, no matter what their background or where they^re from, has the opportunity to get on in life.
^This devolution deal marks a major shift for the people who live and work in Cornwall ^ putting power in their hands and giving them the tools to take charge and make the most of the fantastic potential that Cornwall holds.^
Communities Secretary Greg Clark said: ^This deal is great news for Cornwall and I hope the first of many devolution deals for counties around the country as part of our long-term economic plan. This one nation government is determined to end the hoarding of power in Whitehall and put it in the hands of local people who know their area best.^
Cornwall Council Leader John Pollard said: ^This devolution deal is brilliant news for Cornwall. We were early in recognising the growing momentum of the national agenda for devolving powers from Westminster and, by creating a ^case for Cornwall^ which was strong and realistic we have had a positive response from the government. Cornwall is, therefore, the first rural authority in the country to be given a devolution deal. This gives Cornwall greater powers over public sector funding.^
Irrespective of what emerges in the Buses Bill, devolution alone has put bus franchising firmly on the political agenda. It is, therefore, highly probable that it could become a way of life for many bus operators who hadn^t previously perceived it as a threat.
Questions
Meanwhile there are too many unknowns, forcing operators to come to terms with a period of uncertainty as they face many questions that are unlikely to be answered for months to come.
Although familiar with contracted bus services and the associated tendering process, the UK▸ bus industry is essentially one that operates commercially. Its only experience of franchising is in London, which is often regarded as sufficiently different to the rest of the UK to merit being treated as a special case.
Franchising is, therefore, alien to most operators. The current deregulated model is the result of policies introduced by the Conservatives. It is delivering innovation along with very high passenger satisfaction figures, according to Transport Focus (formerly Passenger Focus). So, has there been an ideological shift by the Conservatives that is forcing a policy U-turn?
In the absence of any clear evidence and sense of direction it is impossible to answer this question, adding further to the sense of unease and uncertainty.
Granting devolved powers to Cornwall may be a political expedient in an area that craves independence, but there is more than a hint that it^s a process that will save money. How can this be reconciled with the introduction of bus franchising that aims to raise standards?
Maybe Cornwall has suffered through the demise of Western Greyhound and the resultant cascade of old vehicles to help fill the vacuum. It^s a county that needs investment, but how can franchising achieve this without significant additional public money?
If it^s an integrated network and smart ticketing that^s wanted, the local authority will need expertise that it is unlikely to have among its ranks. That expertise exists within the bus companies so would have to be bought in. Wouldn^t it be better to work in partnership?
Cornwall is vastly different from Greater Manchester, but the argument for partnership rather than franchising still holds.
Then there^s the thorny questions of compensation, should they overcome these obstacles and plough ahead regardless. And that^s assuming sufficient money has been found to set up and staff the required organisations.
Inevitably all existing bus routes within the defined area will be taken over. If those routes are commercial they represent an operator^s income. Will there be a mechanism for deciding the value, and where will the money come from?
Compensation will also be due to operators for the loss of their business, while the new authority will either have to be responsible for redundancy payments or take on the TUPE▸ requirements.
But what damage will be done in the interim? Innovation will stop. Investment will stop. Training over and above the bare minimum will stop. Smaller operators will be tempted to throw in the towel.
