Associate feature: Franchising folly: Why Scotland can’t afford to copy Manchester’s £226m bus disaster

'Gambling taxpayers’ money on a vague, unworkable idea.’ 

That was Tees Valley mayor Ben Houchen’s scathing verdict on bus franchising just six weeks ago. And he’s absolutely right.

Mr Houchen didn’t have to look too far, just over the Pennines in Greater Manchester, where recent budget papers have revealed that Mayor Andy Burnham’s vanity project — the Bee Network — is haemorrhaging cash at an astonishing rate: a jaw-dropping £226m to be funded by taxpayers every single year, even after fare income is taken into account.

What is the result of this eye-watering annual bill? Manchester bus services rank a dismal 36th out of 39 regions in England. That’s not transformation — it’s yet another expensive publicly run mess.

Meanwhile, here in Scotland, we’ve actually got something that works well.

Strathclyde’s bus services boast a very high approval rating in Transport Focus’s independent survey — the highest in Scotland and comfortably among the UK’s best. Whilst Edinburgh’s buses scored lower than Glasgow’s, Manchester’s are leagues below them. 

Egged on by activists and highly paid external consultants who see the opportunity to line their own pockets, Strathclyde Partnership for Transport (SPT) – which has £180m of Scottish taxpayers’ money sitting in its coffers and reaped a staggering £8m in interest on its cash in the last year — has just begun its second consultation exercise on bus strategy, part of a bureaucratic charade that could lead to full-blown hyper-expensive bus franchising under the Transport (Scotland) Act 2019.

We warned last year that SPT’s franchise extensive wish list could cost £400m a year — a figure based on detailed expert analysis shared with McGill’s Group. That’s almost double the still-growing financial disaster we’re seeing in Manchester. But unlike last year, no elected representative – not one councillor, MSP, or government minister – can now claim ignorance over the true cost of this madness. Manchester’s figures are now public and are in line with industry’s warnings about what it would all cost.

Franchising cheerleaders love to parrot the line that it “returns control to the public.” But let’s be clear: McGill’s was never some hand-me-down from the council — it was built from the ground up at great cost to the owners.

McGill’s Group has delivered where politicians have long failed: integrating ticketing which reduces costs for passengers, introducing Euro VI buses to Scotland and the first Disability Discrimination Act compliant network in Scotland plus much more. Historically, travelling across different operators in Glasgow was expensive and inconvenient. McGill’s helped change that, spearheading the implementation of the Tripper ticket, offering seamless one-ticket travel across all major bus companies in Greater Glasgow.

A business forged by years of risk and personal sacrifice — by me, my brother James, and ably steered by our chairman Ralph Roberts — is now at risk of being confiscated, carved up, and auctioned off to the lowest franchising bidder.

Let’s ask the obvious question: how is a family-owned business like McGill’s meant to compete in an auction against multinational giants with massive bid teams, deep pockets and a willingness to underbid to expand their market share?

With under two per cent of our income from local authority contracts, we are not a contracting business and have no bid team. We would be expected to compete with established giants in the contracting world in an existential auction. That’s not fair and just reform. That’s state-sanctioned seizure. A fair transition to franchising is needed if that is the direction we are to go in.

And yet, better options are sitting in plain sight — if SPT is willing to act. With £180m sitting in its vaults, gathering that £8m in interest annually, SPT has the means to make real, lasting improvements: upgraded infrastructure, priority measures to get buses out of congestion, and long-overdue investment in facilities they’ve neglected for decades. It would be much cheaper and quicker to work with operators, not against them. It would de-risk the reform for the taxpayer.

With £180m of Scottish taxpayers’ money sitting in its vaults, gathering £8m in interest annually, SPT already has the means to make real, lasting improvements in facilities they’ve neglected for decades.

Congestion remains the biggest challenge bus users face. When buses are stuck in traffic, journey times lengthen and bus operators are forced to add vehicles and drivers just to keep timetables the same. That means more cost — especially when an electric bus can cost £500,000 to buy and up to £250,000 per year to operate. Multiply that across an entire network, and the price tag on SPT’s inactivity is enormous. Franchising does nothing to solve that.

If SPT insists on the franchising model, there are cheaper, fairer, and faster ways to get there.

Direct awards could be made to existing operators during a transition period. That would allow companies time to reshape into contracting entities under public control — avoiding the chaos of government-enforced insolvency on a highly regarded private company. The network design could also be delivered in-house, using the expertise of existing operators instead of throwing public money at expensive consultants.

It would be cheaper. It would be smarter. And it would avoid the mistakes Manchester is still paying for — including the eye-watering cost of fixing a system designed without local knowledge.

Legislators are often told by business leaders that uncertainty is the enemy, and this franchising process is riddled with it. The many questions we have asked SPT during this process in the last year have all gone unanswered. That is a travesty and shows how ill-prepared SPT are for this transition. SPT is already out of its depth — and placing further control in SPT’s hands is a recipe for failure.

In what democratic country does the state force a viable, successful, privately owned business into insolvency by stripping away its right to trade? This is not who Scotland is — and not who we should ever become.

Activists and ideologically driven politicians look south and want to create their own version of Manchester — ignoring the huge costs. But the English bus market is not a fair comparator. Scottish networks have always been more efficient, better value for money, and a lower burden on government. That alone demands a different solution. But more importantly, this is about fairness.

So let me leave you with this question: is it fair that a thriving, sustainable, family-built business should face insolvency simply because a combination of government and local authorities want to confiscate its right to trade? The true value of a business isn’t in its assets. It’s in its people and its ability to operate. If there must be a transition, it should be fair and just. It should be honourable.

And it should not come at the cost of destroying what’s already one of the best bus networks in the UK.

This article is sponsored by McGill's Bus Group.

www.mcgillsbuses.co.uk