Drivers have been voting since yesterday (Friday 25th March) on a new pay deal offered by NX Bus, which Unite representatives have recommended to members is accepted, and will hopefully draw the present continuous strike action to a conclusion, and will see normal services resume from Monday morning.
The results of the ballot should be known by this afternoon (Saturday 25th), and if the deal is accepted, then it is expected that NX Bus will be able to offer an improved service level on Sunday, with all services returning to scheduled timetables on Monday.
But what happens next?
The strike action has seen some ugly scenes at various NX depots across the region, with non-striking drivers being prevented from taking vehicles out into service on the very limited network being operated, and the media have been loving the divisive comments being posted on their constant stream of news articles.
Yes, a huge number of people have been massively inconvenienced this last week (including myself), but it is my hope that we can all put this behind us, move on and get back to normal next week, and let any lingering resentment, bitterness and anger fizzle away.
But I do feel there will be an ‘aftermath’ of sorts.
“Extremely Wealthy Company”
Despite numerous claims being made by Unite representatives in the last couple of weeks, NX Bus is not an “extremely wealthy company” that is “raking in millions of pounds in profit”.
The figures quoted by the union – and unquestioningly parrotted by the local media – refer to the National Express Group as a whole. The Group is an international conglomerate of companies, and has some very successful (and profitable) divisions in North America, Spain and Germany, as well as its extensive National Express coach network in the UK. The NX Bus operation (legally West Midlands Travel Ltd, trading as National Express West Midlands and National Express Coventry) is a relatively small division within the group.
The accounts for 2022 are not yet up on Companies House, however those for 2021 make very interesting reading:
In 2020, NX Bus made £1.6m profit from revenue of £172m, while in 2021 they made £6.5m profit on revenue of £140m. The increased ‘other operating income’ I assume comes from government subsidies provided following the end of the Covid lockdown.
Its a bit of a far-cry from the figures quoted by Sharon Graham of Unite, who has been allowed unchallenged by the media to state that this bus company turned over £2.8bn in revenue and made £197m in profit, and thus is “sitting on mountains of cash and can easily afford to pay its staff what they deserve“.
Despite being the ‘dominant’ bus operator in the region, NX Bus is also heavily reliant on government subsidies to keep its business viable, but it is equally not dependent on ‘bailouts’ from its parent National Express Group.
NX Bus still faces the same challenges as the likes of Diamond Bus, who bluntly announced recently that their own commercial services in the West Midlands were “loss-making”.
Will bus fares go up?
I’ve seen it suggested elsewhere that if NX Bus increase their drivers’ pay by 16% then bus fares will have to go up by 16% as a result. It doesn’t quite work like that though, but either way staff wages make up a large proportion of the costs of actually running a bus route.
NX Bus have been less-affected by fuel price increases, as they buy fuel in advance through hedge-funding, but while they may have an advantage over other smaller operators this way, they still face other increased operating costs, such as energy price increases, and maintenance cost increases due to inflation – buying replacement parts and servicing buses etc.
The cost of operating any bus service has increased dramatically since 2020, yet due to TfWM’s insistence that bus fares should remain ‘frozen’ until 2025, the amount of revenue being taken by bus operators through ticket/pass sales remains basically the same, so in ‘real-terms’ (in line with inflation) it’s actually reducing.
The “expectation” from TfWM that more people will switch to using public transport is not quite happening, passenger levels are still not quite at the pre-Covid levels, despite the fare freezing, and even Government schemes such as the ‘max £2 single’ offer.
The recent strike action may have even damaged public perception that much, that those who went back to using their own cars may never come back again.
Will more services be cut back?
Nobody likes things to go up in price, but with everything else around us going up in price lately, it’s kind of remarkable that bus travel hasn’t – in fact for many people, myself included, it actually came down in price following the end of the Covid lockdown.
But to coin an oft-used phrase, “its just not sustainable”.
Now of course I’m not advocating a ‘massive’ bus fare/pass increase, I think a reasonable modest increase might suffice.
There will have to be a balance struck somewhere, between keeping ticket prices at current levels, and services having to be cut back and reduced.
NX Bus drivers and their Unite representatives might be applauding themselves right now for negotiating an inflation-busting pay rise, but this will come at a cost in the long-term, because the more a bus service costs to operate, if the revenue figures don’t add up, then the more likely that service will be cut back or withdrawn – and the more that bus services are deemed ‘unviable’ and have to be cut back, then the more jobs will be lost as a result.
The inevitable “franchising”
Deregulation in 1986 was meant to ‘open up the market’, anyone could start a bus company, register routes/timetables, and start operating bus services commercially – providing a public service for private profit, with minimal cost to the taxpayer, especially those who didn’t use bus services.
West Midlands Travel – now NX West Midlands/Coventry – has always been the biggest operator of bus services in the region, but over the years there have been numerous other smaller operators who found their own little corners of the network that WMT didn’t want to touch.
Within the last few years, we’ve seen many of these either ‘throw in the towel’ and close down their public bus services, or sell out to other bigger operators, or even collapse into administration.
While there probably are advantages of having one operator being so dominant, the strike action has highlighted just how vulnerable the network becomes if the drivers of one operator withdraw their labour and go on strike like this.
So there will be those who will call for the ‘monopoly’ to be broken up, however the only way this is realistically going to happen is the bus services become franchised, ie “re-regulated”.
Bus services in London have always been like this, and franchises are set to be introduced in Manchester and Liverpool. Interestingly for the last few years, WM Mayor Andy Street has expressed his preference for the ‘partnership model’ being achieved through the West Midlands Bus Alliance, but it seems now that both he and the prospective Labour mayoral candidate will be promising the introduction of franchising to the West Midlands. (Mayoral elections are due to take place next year in May).
Now of course there wouldn’t be anything stopping NX Bus from bidding on and winning franchise contracts, but the expectation would be that other operators – including those from outside the WM – would want to win contracts as well.
But I expect the bidding process will favour the bigger groups – Rotala (Diamond), Stagecoach, First, GoAhead, Arriva etc – and disadvantage the smaller independent companies.
What a franchised bus network would look like in the West Midlands, and whether it would truly benefit the travelling public, remains to be seen, but one thing is for sure, it will come at an enormous cost to the taxpayer…
Featured image (c) Tony Hunter, WM Buses In Photos, used as always with permission
