World-class standardsBut if you want a world-class transport system, in a world class city, then you have to be brave enough to impose serious world-class standards on the operators who are going to deliver the services.This has been going on since 1985, and all the nonsense about ‘barriers to entry’. In cities like Manchester you need to be able to guarantee that every bus is of a certain standard, will accept the same ticketing and deliver the same quality. You don’t need to be in a position where you leave room for someone to turn up with a 20-year-old bus and outmoded ticketing technologies.If you franchise you impose serious standards, but what about imposing serious standards without a franchise? Why don’t we say, if you want to run buses in a major metropolitan area, you have to be part of the partnership. There has to be a partnership, and all the members of the partnership are entitled to have a say in the decisions of the partnership.There also have to be obligations, on the LA and the operators, but they all have rights as well. That kind of radical partnership is what we should be using the 2016 Buses Bill for, not franchising.Franchising is attractive to people. If you had shown me the original Nexus proposal in 2012, and I was a normal member of the public, I would have said yes. It said you’d get more bus services, fare controls, quality service standards and it’s guaranteed for 10 years.But the problem is money. It’s like when you were a child and were saving for a train set you saw in the toyshop window. You’d save all your money for six months, then empty your piggybank on the counter, and the shopkeeper would say: ‘Sorry son, you’ve not got enough, the price has gone up’.It’s a real blow when that happens. You think you can afford something, and then suddenly you can’t.And that’s what Nexus has done. In the QCS hearings, Nexus confirmed there is a 31% chance that it can’t afford it. This is on Nexus’ own arithmetic: They are saying there is a one-in-three chance they will be like the child in the toyshop.Then they were asked what they would do if that happened, and they said there’d be no more public money. Instead, the fares would go up and the services cut. Yet the whole project is based on guaranteed services and fares control.There is a 100% chance â€“ and there’s no ambiguity in this â€“ that the QCS proposal cannot be sustained beyond the first 10 years. And when asked ‘what are you going to do about year 11’, there were two answers: The first one was ‘something will turn up’. The second was ‘we can always go back to deregulation’. 30 years’ painMost people are too young to remember the pain of that. But the idea that we would go through 30 years of pain to get to where we are now, to have the kind of partnerships that we have now, and we rip it up for a 10-year jolly and then for us to do it all again, is absolutely total and utter lunacy.Finally, that 10 years is funded by a splodge of revenue that comes from three things: Ticketing will be simplified, which means more people will travel, says Nexus. This is assuming that people who don’t pay fares will travel more often because ticketing is simple â€“ why would they do that?Secondly, more people would travel because there will be a single passenger charter. I’ll do one of those myself tomorrow if that’s going to solve all our problems.In the final bit, there’s a notion that there’s some kind of ‘invisible’ money somewhere in the industry that’s not being put to good use. Even if there was a pot of gold, and even if it did generate travel, Nexus doesn’t plan to run a single extra bus, so how does this is all fit together?So it’s not credible. If it is only credible for a 10-year party, then we’re back to the Cambridgeshire situation, that it’s spending the mortgage and it will get found out.If we don’t embrace partnership and take it forward properly, but decide to franchise the English bus network, independent analysis by TAS has proved that the cost of replicating the London model for the next 20 years is more expensive than the HS2 rail link. And do we really want to do that? Frozen in aspicThat proposal was put together in 2012. It’s a clear documented plan that would be implemented in 2017, in a form that would freeze the bus industry until 2027. Who thinks that in these days you can put together a business plan in 2012, and leave it untouched for 15 years, and it will still be seen as relevant and modern?That is one of the reasons that partnership is important, because it is dynamic and flexible. It moves, it changes and if stuff happens, the partners can sit and talk about it.If you’re locked into a 10-year franchise, based on a plan made five years earlier, then it isn’t flexible, it isn’t changeable. You can’t move with the times, you can’t deal with stuff as it happens.And, if you do, it becomes very expensive to do, because people have made contractual commitments.The 2000 and 2008 Act, that modified the 1985 Act, tried to provide more tools for partnerships as well as franchising â€“ the Quality Contracts Scheme (QCS). The partnerships that it allows don’t go far enough. It doesn’t allow us to develop the real kind of partnerships we need.I’m in discussion with an authority that wants to develop an enhanced partnership. But it’s not â€“ it’s just a shopping list of things they want to see. The shopping list is okay, about 90% of the things on the list we’d do anyway. We’re in discussions, but a partnership? We’ll probably end up having a huge row, because it’s not a partnership and we wouldn’t dignify it with the name.Partnership is a two-way street; it’s about giving and getting. About both parties doing things they’re good at, and keeping their hands off the things they’re not good at. Because this way, you get a better result. That’s a proper, real, partnership.We don’t have many of those. This is because there are powers LAs don’t have that they should have. There are powers that the Competition and Markets Authority have that it probably shouldn’t have. There are a variety of things that if you want to make it work, you have to do differently. Checklist itemsTo make a partnership work, there are a number of things you need to have on your checklist.Firstly, you need to have a very clear joint objective. You’ve got to know what the partnership is about, you’ve got to agree on what you want to do and where you want to get to.You need to have a very clear governance structure. This should involve the LA, the operators and any other relevant stakeholders, and maybe a couple of significant independent directors. You want something that looks at the whole picture and a group of people who take decisions for that common good.You need to sort funding out for it. The Department of Transport roadshows going around the country consulting on the Buses Bill have two things you’re not allowed to talk about. One is funding, the other is franchising.To have a secure partnership, you need to have secure funding.If you go down the franchising road, you’re going to commit to 10-year contracts. But if you’re going to do that in franchising, why don’t you commit to secure funding for partnerships?You need a high-level perspective of what the network is designed to do. We need to understand from a LA perspective what are the important things that the bus network in the area needs to deliver; some of them social, some of them economic development, and so on. If we know what they are, we can plan together with them, to deliver them.You do need to address congestion. If you don’t, you’re burning five pound notes.A partnership needs to look at ticketing and payments, because it’s the fastest-moving element of the bus industry today. We need to create an environment where it’s possible for people to travel using Apple Pay, PayPal, or contactless cards.It is possible and you don’t need a franchise to do that. Together with the four other groups we are looking at a way in which we think it can be done. It means radical change and might need to be underpinned by legislation â€“ which is where the Buses Bill could be useful.Then there are other things, such as integration, branding, environment, accessibility, investment, standards and so on. Mature approachPartnerships require a mature approach by everybody. Understanding that we’re all in this together â€“ we’re better together and can achieve more together.There was a very good reason for the 1985 Act; the rocketing cost of supplying buses alongside the massive haemorrhaging of passengers â€“ double-digit passenger regression year-on-year in the early 1980s.One of the issues at the moment is that there are relatively few people around who were over 20 in 1980, and remember what it was really like. A lot of people, who currently see franchising as the answer, don’t remember what it was like and don’t remember why the ’85 Act happened in the first place. They don’t remember all the downsides. We need the proposed Buses Bill to create a new kind of radical partnership, not franchising. Stagecoach UK Bus MD Robert Montgomery sets out what could be achieved and the threats facing the industry from deliberate disruption.As a PLC our objective is to grow, so we are interested in carrying more people on buses. It is a long-term growth business and we’re riding a long-term growth wave.To continue that growth the business needs to keep changing, being relevant and dynamic, and doing different things. So we welcome the Government talking about a Buses Bill for 2016. We don’t agree entirely with everything that might be in it, but we do agree that there needs to be change.Long-term deep partnerships are important in all walks of life. There’s the common partnership many of us have in marriage. It’s a fundamental institution; you can do things together, achieve more together and have stability together.We see some of our partnerships with local authorities (LAs) as being like a marriage: They are long-term, there for the long haul, for better or for worse, richer and poorer, sickness and in health, until terminal traffic congestion and patronage decline does us part.We see relationships with LAs as a key part of our business. Four examplesI want to touch on four partnerships we have. We’ve been operating in partnership with Oxfordshire County Council (OCC) for over 40 years, both ourselves and Go-Ahead in current and previous ownerships.In the early 1970s OCC decided it needed a radical public transport policy, focusing on parking restraints, bus priority and park-and-rides (P&R). It has endured and donevery well.We’ve always had debates about what’s right and what’s wrong. About six years ago OCC decided the partnership was too successful and there were too many buses. We pointed out that if you took the ‘too many’ buses away, you’d have far too many cars; but we had a debate. What OCC wanted to do in our view was madness; what we wanted to do in their view wouldn’t fix the problem.We had some very robust discussions â€“ as you do in partnerships â€“ and we ultimately came to a solution that has worked very well. There are now fewer buses, a co-ordinated timetable and smart ticketing. The net result is that traffic has improved, the number of people on buses has grown dramatically, and the partnership continues and flourishes.It is not a formal partnership. There is no grand documentation, and the deal we have is that they create a good environment for bus operation while we three [including Arriva] very professional operators deliver the service. They are content with that. We are content with that and it works.Similarly, we have a long-term partnership with Fife County Council, which has underpinned and supported long- and short-distance park-and-ride sites, allowing residents to commute to work across Scotland. Rights surrenderedWe have a very radical partnership between ourselves, First and South Yorkshire Combined Authority, in place for three years. We signed with a degree of trepidation as we were signing up to do some very radical things. One was that we would surrender our right to take unilateral decisions. In future neither operator nor LA decisions would be made: They would be joint partnership decisions.We agreed to put BSOG into the partnership and some radical commitments as to what we would do. We went into it as it was designed to generate growth; and if it did we would make money. If it didn’t we would be stuffed, as we had given up the levers we could pull.That partnership has performed very well, seeing growth, where there was previously a declining market and there’s been lot of activity to move people away from car use. But, about a year ago ourselves and First were looking at it and saying that the network isn’t sustainable in the long term, to generate sufficient funds to reinvest in the vehicles, and the kind of dynamics that we all want to see.We put that problem into the partnership, sat down with our partners and said, if we want to achieve what we set out to do two years ago, we need to shift things intrinsically now.Over the last nine months we all worked together and on 1 November we will launch a revised network. That has been designed, agreed, consulted on and sold to the community of South Yorkshire by the partnership. And when it goes in, the partnership will sink or swim by it. And that was all joint decision-making â€“ true, genuine, active partnership. Disruption threatFranchising is wrong, but we do need a Buses Bill and we do need change. We need an industry that thinks about the future and thinks differently.And that’s because right now, there’s probably a guy sat in a caf in Los Angeles, California, with a hoodie, iPhone, laptop and iPad, using all three at once, drinking a flat white. He’s planning to disrupt the public transport system in Stoke-on-Trent.There are people out there using new technology who will disrupt and transform the UK bus industry over the next five, 10, 15 years. So there has to be change. Things have to move forward.And that’s one of the reasons why franchising is a big mistake. The only full proposal we’ve seen has been put forward by Nexus for Tyne and Wear. Marriage in hellThe last one is Cambridgeshire County Council (CCC). We’ve worked informally in partnership, developed a very successful city network, a very successful commercial park-and-ride operation and worked with it to make a success of the guided busway. Bus use has grown dramatically on the back of all those.And then, about a year ago, CCC decided it was suffering from austerity and needed cash. It took a unilateral decision to dip its hand in the cookie jar and applied an arbitrary 1 charge to anyone using the park-and-ride sites. It was a bit like a medieval window tax. It had nothing to do with public transport policy, and everything to do with pocketing cash.Partnerships can be like marriages, and we didn’t like what they’d done. It’s a bit like discovering that your wife or husband had gone into the joint bank account, taken next month’s mortgage payment out, and gone on holiday with it. And the kind of conversation that would take place if that happened was the kind of conversation we had with CCC.We were incandescent. It was a clear, total reason for a big ‘domestic’. We had a series of angry exchanges, a huge row. We were not happy, we are still not happy. We are still bruised and upset. I still think it was the wrong thing to do. But they aren’t going to change their mind.They have done it; they’ve got the cash. They accept that there’s been a 14% fall in use of park-and-ride sites, but that is ‘collateral damage’. We see it as almost infidelity. It is a complete betrayal of everything we are trying to do together.How’s it panned out? We’ve had the row, we still feel aggrieved. But we’ve decided that we’ll stay together for the sake of the customers. We’re not going to split up over it; stuff happens, that’s the way partnerships work, they don’t all work perfectly.