Associate Feature: Fares please - that will be £400m madam!

In Scotland, suddenly, there are loud voices talking about bus reform. The volume has certainly increased in the Greenock boardroom of McGill’s. 

How so? Well, after spending two decades building the biggest private bus company in the country, Sandy and James Easdale now face the possibility of their company being snatched from them and the Scottish taxpayer being faced with an annual bill of £400m.  

It feels like something from the playbook of President Putin but instead of an evil dictator we find ourselves at the mercy of Strathclyde Partnership for Transport (SPT).

We suddenly find ourselves in this position due to the implementation of the Transport (Scotland) Act 2019 in Strathclyde. The Board of SPT have decided to pursue bus franchising as their preferred option for bus reform. Many of the SPT constituent council’s elected members have expressed how this should take place, which is a drop-dead competitive competition for the operation of bus services in Strathclyde. This would mean that McGill’s would have to cease trading and close its business unless it won the competition – effectively having its business confiscated via having its right to trade confiscated. A local hairdresser wouldn’t be forced out of business so why a bus company?

In the years before Covid, buses were talked about at Holyrood by relatively few parliamentarians. 

The roots of this current debate can be traced back to the recovery from the Second World war. Then, buses were plentiful and were a mixture of privately owned and municipal companies. As we went through the ‘Nationalisation’ era of the 1960’s, most of these bus companies were bought by the government with only a handful of family firms defiantly staying independent. 

McGill’s was one of the first companies in Scotland to hold a Public Service Vehicle Operator’s Licence and McGill’s was one of those who chose to remain private and operate its routes around the newly nationalised bus group. 

As we approached the end of the 1970’s, the UK was effectively bankrupt. The 1979 general election saw a binary choice of two philosophies. To either continue as we were, taking more bail outs from the World Bank or to change course completely and slim down government, generating economic growth and exercising fiscal prudence. We all know what happened, the British public chose to live within its means. 

The changes for the bus sector came in the new Conservative government’s second term but the roots of the change came from debates much earlier than that. The publicly owned bus sector was very expensive to run, was very inefficient and was failing. Footfall had been declining heavily since the early 1950’s. There were many reasons for this, with societal change being foremost. The private motor car, television, public planning policy, the introduction of driver- only buses which saw a doubling of journey times on some routes and the changes in roads policy that baked in road space allocation according to vehicle size, regardless of the number of occupants all played their part. There are now generations of roads and town planners who know of no other way to do things.

The Table below shows the huge fall in the use of buses that took place before privatisation in 1986 and the successful reversal of this trend in the years after. It also shows the gargantuan increase in use of the private car which is obvious to anyone who grew up in the 1960’s. In spite of these headwinds, the bus sector is still the most popular mode of public transport in Scotland and delivers 75% of all public transport journeys. This dwarfs rail, air, tram and underground use and 84% of all bus journeys are commercially sustainable. 

So why are politicians falsely claiming that the bus sector is broken? 

Public debates are good, and a full review of important sectors such as Bus should happen every 25 years or so in order to make sure that the regulatory and operating landscape is keeping pace with societal changes. This debate must be factual and honest and result in policy that is fair, just and to the benefit of the people of Scotland. I believe that this is what led to the Transport (Scotland) Act 2019 but I question whether the provisions will result in a fair or just outcome for business owners. I also fear that the public will end up with a diminished bus service rather than an enhanced one. 

The problem with much of the debate around the bus sector is that it is disingenuous. It generally takes a small fact which is twisted to give a different meaning – such is the way of modern politics it would seem. One example of this is that some political activists point to the decline in bus use post 1986 and say that the 1986 privatisation Act is the cause of this. They hide the fact that the decline in bus use prior to the 1986 act was many times worse. It is an old trick. 

McGill’s is a private business which has been built with huge investment from its owners, Sandy and James Easdale. They head up a family conglomerate with interests in a variety of sectors such as transport, vehicle leasing, manufacturing, a global hydration brand,  recycling, metal processing, property and land acquisition with a private family investment company run from their central London office. The McGill’s business has been run on the principle that it should be sustainable for future generations of the family, have modest profit margins and have a social conscience. For the last 14 years, I have been CEO. I am a public transport turnaround specialist and together with the Easdale brothers, have saved several ailing bus companies in Scotland.

All of this has been done in the belief that Scotland is a place where you can build a competitive business that is sustainable and will not be confiscated by a dogma driven government.
Winning such a franchise competition would be an outside chance for a business the size of McGill’s in the face of competition from large multi-national conglomerates with seasoned and well-practiced bid teams. 

Less than 2% of McGill’s revenues come from contracted operations. With over 90% from commercial operation, it has no need for a bid team and with the current timescales and secrecy being adopted by SPT, McGill’s is in the dark about when and whether to invest the money to build an expensive bid team. We are left with no option but to fight the move in an expensive and wasteful use of resources which would normally be used for investment in bus services. 

SPT say that their purpose in pursuing reform is to increase the provision of bus services, lower the cost of travel and gain control of the planning of them. If this is achieved competently, it will come at significant cost. We estimate the current SPT wish list would cost the Scottish taxpayer £400m per annum in additional subsidy. Given the scale of the wish list, this is probably reasonable value for money. However, the transition to it should be achieved in a just fashion and not suddenly confiscate businesses built in good faith under the law in this country. 

If Scotland is to be a modern progressive country, it must build on honourable and just foundations. We cannot indulge in business theft or fantasy politics. Buses are a crucial part of people’s lives, they are not playthings in a game of dogma or control. If we are to change how we operate, fund and control our nation’s bus services, it must be done with advice weighted towards those who know how to achieve it. Changing ownership or regulation is easy and alluring, but the accountability that goes with it will be unwelcome, as they are starting to find out in Manchester. 

This article is sponsored by McGills Bus Group

www.mcgillsbuses.co.uk