£3.5m Bus Franchising Assessment Approved Amid 'Empty Buses' Warning

North Yorkshire Council leaders have raised concerns about taxpayers subsidising empty buses as the Combined Authority approves a £3.5m assessment into a proposed bus franchising scheme.

North Yorkshire Council leaders have warned against taxpayers being left to subsidise “empty buses” after further work towards potentially franchising bus services across the county was approved.

York and North Yorkshire Combined Authority members today backed Mayor David Skaith’s intention to formally begin an assessment of a proposed franchising scheme.

Up to £3.5m has been allocated to develop the assessment, which will examine whether bringing services under greater local control could improve outcomes for passengers, communities and businesses.

No decision has yet been taken to introduce franchising.

However, the move prompted concerns from senior North Yorkshire Council figures about whether a franchised network could be financially sustainable across such a large rural area.

Council leader Councillor Carl Les questioned why the authority was pressing ahead with the work before the results of rural bus pilots were known.

He told the mayor:

Clearly, you believe that franchising is the silver bullet. I’m not convinced about that, but we can disagree.

Having dealt with public transport in a rural area for many years, we know it is easy enough to create demand. You announce a new service and put that service on. The challenge is keeping that demand sustainable.

Our experience is that we have subsidised a lot of empty buses running around the county, which is why we have rowed back on those subsidies.

Cllr Les asked who would ultimately pay if new routes were introduced but failed to attract sufficient passengers.

He added:

Can I have an assurance that there will be no levy on North Yorkshire council taxpayers to subsidise — my words, perhaps not yours — empty buses operating on unsustainable routes?

Mr Skaith said the funding question was “a point for another day further down the line”, but argued that one of the advantages of franchising was the ability to use money generated by profitable services to support less commercially viable routes.

He said:

Instead of money going to shareholders and private operators, it comes back into the system to help support those routes that fundamentally won’t be as sustainable and would need further subsidy.

That is fundamentally the model of franchising, and that’s the model I think we can start exploring with this work today.

The mayor said that under the existing system, public authorities were repeatedly having to subsidise services while money generated by profitable routes was not necessarily reinvested elsewhere in the network.

He said:

That’s the opportunity around a franchising model — to take the profits from those more profitable routes and support routes that, as you say, may never make a profit but are still equally important to communities across the area which need a vital bus service for commuting, education, health and other reasons.

North Yorkshire Council deputy leader Councillor Mark Crane also expressed concerns about the economics of franchising in rural areas.

He said:

What you will find by franchising is that you will probably lose money across the whole board.

We have got successful services, and we will continue to have some successful services, but in the more rural spots, it’s very difficult to run a bus system that a number of people are willing to sit on and travel on.

But Councillor Kevin Foster, leader of the Green Party group on North Yorkshire Council, welcomed further exploration of franchising.

He said:

The Combined Authority is undertaking a rural franchising pilot, including work covering Richmondshire and Northallerton, to establish whether franchising could work effectively in a predominantly rural area.

Franchising could give the authority greater control over routes, fares and service standards, but it is important that the evidence from the pilot is properly assessed before any final decision is made.

What happens next:

Today’s decision does not commit the Combined Authority to franchising the region’s buses.

Instead, Mr Skaith has issued a formal Notice of Statutory Intent to Prepare an Assessment of a Proposed Franchising Scheme, with up to £3.5m allocated to carry out that work.

The assessment will consider whether franchising could produce better outcomes for passengers, communities and businesses and inform any future decision.

The work will also allow the authority to consider the results of the Department for Transport-funded Rural Bus Franchising Pilot Study, which is expected to report at the end of October.

Under franchising, the public authority would have significantly greater control over how the bus network operates.

Government guidance says franchising is not compulsory and local transport authorities must decide whether it is the right approach for their area.

The Combined Authority already has devolved powers to introduce bus franchising as part of the York and North Yorkshire devolution arrangements.

The authority approved its latest Bus Service Improvement Plan, which sets out ambitions for a more reliable, integrated and accessible network, including better rural connectivity, affordable fares and improved evening and Sunday services.

In his statement following today’s vote, Mr Skaith said the existing bus network was not working for too many residents.

He said:

Bus services across York and North Yorkshire just aren’t working for our residents.

Too many people are cut off from training, jobs, leisure and being able to get where they need to go.

We need to move away from a system that allows private operators to extract profit from our region, so we can reinvest that to support more services.

The mayor described the vote as a “significant first step towards more public control over our public services.”