As if we haven’t spent the last six months thinking that we’re living in strange times, the past month has seen things take an even more concerning turn.
At the end of July, Stagecoach announced they were forming a new “Stagecoach Solutions” unit for corporate travel, education and contract services. This bears a striking resemblance to First Travel Solutions, First’s outsourcing unit which spawned from their rail replacement organising office. Coach operators, particularly those with significant investment in expensive vehicles for corporate work and who have already had a kicking from the pandemic, should be very concerned.
Another month on, and we stand at the end of August where First locally have started taking on considerably more dedicated home to school transport than they have ever shown an interest in previously. Clearly CBSSG cash, along with home to school funding for unentitled students (managed locally by WECA or Somerset) is making them take notice.
First are now apparently able to find resources for dedicated school buses to enable social distancing on several routes which have previously been notable for particularly busy journeys, providing dedicated journeys to Oldfield School (five journeys each morning and afternoon, using three buses), Wells Blue School (an extra 126 journey) and Strode College (an extra 376). Curiously at the same time, they also decided that the R2 service to Ralph Allen School from South Bath was no longer viable and this has passed to Abus, although this change may result from forthcoming changes to Bath University service U2 which runs in parallel.
Will distancing go the distance?
With central government having committed to continue the CBSSG scheme until eight weeks after the end of social distancing, there is now something of an elephant in the room, particularly with the group operators. One of the keystones of the CBSSG scheme is that operators are not supposed to turn an operational profit during the time it is in operation, which includes generating any funds towards capital reinvestment. Whilst most big operators were satisfied not to be making huge losses during the worse of lockdown, there is now a concern that shareholders may be increasing losing patience at having their investment tied up in what is effectively a charity for the time being.
The big question is: how long will social distancing on public transport remain in place as the government appears to be keen on reducing their ongoing spending on transport? The current spending on maintaining railways at normal frequencies whilst carrying 10-15% of normal passenger loadings cannot be maintained indefinitely, and nor can CBSSG for the bus industry. The difference would appear to be that while the railways are apparently accepting their nationalised future, (with £4bn pledged to keep GWR alone afloat for another year), the larger operators in the bus industry are making preparations to survive when the money stops coming in.
It seems both feasible and likely that bus services will reduce by a substantial factor when CBSSG ends, which leads us back to the Solutions market (as mentioned in the first paragraph) becoming an increasingly important part of the future business plan for the large groups, certainly those intending to keep expanding their market share.
Certain specialised markets are expected to retain a significant level of demand (such as home to school travel), along with guaranteed income. This has attracted interest from not only larger operators, but also brokers such as Zeelo who are reported to have moved in to the Home to School market, apparently offering to take over the management of provision for entire schools.
Perhaps when the big crunch at the end of CBSSG funding comes, we are looking at the brokers and big groups who have positioned themselves to move in on services which have traditionally been the reserve of coach operators and independent bus companies.