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Ministerial foreword

Lee Waters MS, Deputy Minister for Climate Change:

Buses are the backbone of our public transport service. They carry three times as many passengers as trains, getting people across Wales to work and school, allowing us to meet family and friends, and offering a key lifeline for the quarter of people in Wales who do not have access to a car.

Governments have long recognised the importance of this public service, even before the COVID-19 pandemic we invested well over £100 million every year in bus services. However, the legacy of privatisation still prevents us from planning buses as a public service and designing networks to ensure that investment gets people where they need to go.

That isn’t good enough.

The scientific advice on Climate Change is as clear as it is stark. We have to make urgent changes to the way we live and take meaningful action to avoid catastrophic damage to our climate.

Transport accounts for nearly a fifth of our carbon emissions, yet we cannot currently plan bus networks to break our reliance on private cars and make sure people can access services reliably and sustainably. This is a key barrier to delivering a just transition to net zero.

This white paper sets out our plan to fundamentally change the way bus services are planned in Wales – allowing all levels of government in Wales to work together to design the bus networks our communities need.

I would like to thank both local government colleagues and industry partners for their work with us to help develop these proposals and look forward to continuing to work closely together to build the bus system Wales needs. 

This consultation marks the start of a process by which we can significantly improve bus services in Wales and take meaningful strides towards delivering a transport system which helps rather than hinders our journey to Net Zero.

I look forward to receiving comments and views on these proposals. This is a generational opportunity to make a change and implement a bus system which works for Wales. We want to work with partners to do it as effectively and fairly as we possibly can.

Your feedback and continued engagement as we finalise the legislation proposed in the white paper can help us get there.


The climate emergency demands urgent action. We need a decade of action which goes further over the next 10 years than we have in the last 30. The scale and immediacy of this challenge is laid out in our overarching plan to tackle it: Net Zero Wales Carbon Budget 2

For climate damaging emissions, transport has been the worst-performing sector of the economy. We need to change the way we travel. Even if we electrify vehicles at the fastest feasible rate, we will break our carbon budget unless we reduce the number of cars on our roads and instead use public transport more and make more local trips by walking or cycling.

To achieve this change we need a transport system that works for everyone and offers a real alternative to relying on a car. This is essential to ensure there are affordable transport options for everyone to get where they need to go, as well as to meet our climate targets. At an average of £44,000 (average cost of an electric car 2021), an electric car is beyond the means of many families. Furthermore, approximately 13% of households in Wales do not have a car (The National Survey for Wales), and 25% of bus users are disabled or have a long-term illness (analysis undertaken by Transport for Wales, 2019). This highlights the crucial social and economic role buses currently play and could play in the future – they are a key lifeline for people across Wales to access services, get to work, and meet family and friends.

The Welsh Government is intent on achieving a bus system that boosts social equity and is capable of delivering the scale of modal shift required by the climate emergency.

This white paper is about creating a bus system dedicated to providing the best possible service to the public. That means a bus system which is governed and designed to serve the public interest, with the widest possible geographic coverage, fully integrated connections between different services, the highest possible service frequencies, and simple unified easy-to-use ticketing and information – expressed simply: ‘One Network, One Timetable, One Ticket’.

Climate change requires us to think beyond the immediate, this vision needs to govern how we deliver transport services over the next 30 years. The current deregulated bus system is directed by market forces rather than public need, and has shown itself incapable of delivering the scale or pace of change we need. This white paper is about putting in place a governance system for buses that will give us the power to achieve this vision of affordable comprehensive public transport services that work in a joined-up way to carry us on our journey to net zero.

What are the aims and objectives?

The vision set out above requires a transformation in how buses in Wales are governed to achieve the following over-arching aims:

  • a bus system that is purposely designed to maximise the public good
  • a bus system that efficiently uses public investment to strategically address public priorities for bus improvements, thereby justifying greater public investment
  • a bus system, which forms part of an integrated transport network that provides an excellent travel option, wherever people need it, whenever people need it, throughout Wales.

Legislation alone cannot achieve these aims, nor, on their own, can traditional scheduled bus routes: a much-enhanced scheduled network must provide the basis for linked flexible services that extend the reach of buses to cover many more times and places. Implementing the legislation, and introducing franchise contracts over different areas, will take time and will probably require iterative improvements to reach the ambitious level of service we are aiming to develop. We will need to continue making the case for further investment in bus services to deliver the extent and regularity of services they require. We will also need to continue work on demand-responsive travel options, such as the Fflecsi service being piloted by Transport for Wales, to offer reliable, sustainable, affordable travel options in places and times when scheduled bus services are not available. However, this sets out where we’re aiming to get to, and the path our legislative proposals set us on.

The term demand-responsive transport encompasses various forms of service, from buses to minibuses and taxis, that are provided to be flexible about times and/or destinations and enable people to request travel to places and at times beyond the reach of scheduled bus services. Further information on the Fflecsi service is available on Fflecsi Wales.

To provide an excellent travel option for people in the long term, we will need:

  • a comprehensive network of bus routes to serve the widest feasible range of destinations, both at busy times and less busy times in the evenings and Sundays.
  • coordinated timetables for bus-bus connections and bus connections with all other modes of public transport.
  • simple area-wide fares, valid across all bus routes and on all modes of public transport.

These three objectives are best summarised by the title of this white paper: ‘One Network, One Timetable, One Ticket’.

Further objectives for an excellent bus system include:

  • bus services that run quickly and on time, with congestion-busting dedicated road space and bus priority infrastructure enabling buses to offer a time-competitive alternative to private car use.
  • a stable bus network from one year to the next, that people come to know and trust.
  • easy-to-find comprehensive information and a unified high visibility brand.
  • affordable fares that represent good value in comparison to driving.
  • passenger-friendly drivers, trained and supported to be front-line ambassadors providing a day-to-day public face for the bus service that helps attract users.
  • good quality waiting facilities and vehicles, with a rapid transition to zero emissions vehicles.
  • all parts of the bus operating sector delivering according to their particular strengths, including SMEs (Small and Medium-sized Enterprise), municipally owned companies and corporate players, and for demand-responsive services, taxi providers and community-based operators.

The aim to achieve efficient use of public investment requires the following strategic objectives to be achieved:

  • ability to develop, plan and implement bus routes and networks
  • effective public control over the way in which public money invested in the bus system is spent, including control over how ticket revenue is reinvested (ticket revenue is often referred to as ‘farebox revenue’ and is the money/revenue taken from passengers to use services).
  • ability to implement policies for affordable and concessionary bus travel without difficulty or undue expense due to prolonged negotiation or complex systems for operator reimbursement.
  • a healthy market for competition for franchise contracts.
  • ability to apply public monies in ways that effectively complement and lever in investment from the private sector.
  • all road passenger transport funded and governed together to maximise synergies, minimise wasteful duplication and optimise demand-responsive infill to the network of scheduled bus services.
  • ability to closely integrate expenditure on bus improvements and fare reductions with actions to reduce car reliance, to form a strategic transport policy for mode shift.
  • integration of bus system investment with land use planning and economic and development investment, so that new development is focused in locations with strong bus services and so new developments themselves are designed to facilitate the flow of bus services through the development.
  • multi-year sustainable funding allocations for bus services and bus infrastructure that enable long-range strategic planning and investment, optimal use of available monies and development of sustained improvement packages targeted to grow patronage.

Outline legislative proposals

The Welsh Government believes that the legislative proposals contained in this paper are necessary to help achieve the aims, objectives and ambitions set out above. This paper will set out each proposal and describe its potential to support the changes we are seeking.

We should be clear that this is the start, not the end, of the journey. Legislation will create new and better powers for all levels of government in Wales to co-design the bus network Wales needs, and unblock local authorities from setting up and effectively running their own bus companies. However, it will take time to achieve. We will need to work with a healthy market, competing for contracts instead of competing for passengers at bus stops, both to get effective franchised networks up and running and to make the case for further investment to expand those networks and reach the extent and quality of service we want to see.

Our legislative proposals include:

  • requiring the franchising of bus services across Wales
  • allowing local authorities to create new municipal bus companies
  • relaxing restrictions on existing municipal bus companies to put them on the same footing as new ones

Context and background

Much of the data used within this white paper comes from before the COVID-19 pandemic (mainly 2019/2020). This gives us a better picture of what was happening when passengers were making transport choices without having pandemic restrictions at the forefront of their decisions. We also recognise that as we move out of the pandemic passenger choices will have changed. For example, the COVID-19 pandemic has caused a step-change in working from home where possible, moving us closer to the Welsh Government’s long-term ambition to see around 30% of Welsh workers working from home or near home (Aim for 30% of the Welsh workforce to work remotely) – giving more people the choice to work in a way that helps their productivity as well as their work-life balance, and with the potential to drive regeneration and economic activity in communities. It seems likely that there will be long-term changes to patterns of bus use as a result, but it is as yet unclear what form these changes will take. However, the proposals in this white paper are fundamentally about ensuring we can design bus networks as a public service, getting people wherever they need to go even if travel patterns change in emphasis between local high streets, city centres and other destinations. 

Wales, prior to the COVID-19 pandemic, had 1539 registered bus routes (The National Survey for Wales as of 31 March 2018), serviced by 2378 locally operated vehicles, driving 88.8 million in service kilometres each year. These local bus journeys account for three out of four journeys made by public transport in Wales each year. Bus services in Wales provide important access to essential services, education, leisure and tourism, and provide important links for communities. 

Looking at the most recent patronage, where the COVID-19 pandemic has had a big impact, bus user numbers have reduced by around 90% over the past 2 years, severely reducing the income from fares. However, the Welsh Government has enabled bus operators to continue providing some services through its Bus Hardship Fund (BHF) and the Bus Emergency Scheme (BES). 

The COVID-19 pandemic exposed serious issues around the resilience of the bus services network in Wales and the vulnerability of the bus industry from reduction in patronage and fare-box revenues. As Wales recovers there is an opportunity to legislate for the much-needed reform of the planning and delivery of bus services, and to enable an increase in bus services in a way which achieves a range of policy objectives.  

Despite bus services being an essential part of the public transport network in Wales, they are in decline with passenger numbers falling steadily for many years on most routes in Wales. This decline reflects a similar picture across the UK as a whole. 

Distance travelled on local bus services, 2009-10 to 2019-20

Source: Welsh Government analysis of Department for Transport 'Public Service Vehicle survey'.

There has also been a decline of routes offered and number of vehicles on the road, (a decrease of 71 vehicles from 2017, Public service vehicles (buses and taxis): April 2019 to March 2020). Falling passenger numbers puts pressure on fare paying passengers and the public purse to sustain a network that, despite significant investment from private and public sources, continues to decline. This in turn exacerbates the pressure on local authorities as they identify and subsidise socially necessary services for local communities.

Although the decline must be noted, this is not to say that buses are no longer wanted. Far from it. Bus remains as the most popular choice for public transport, and accounts for about 90 million passenger journeys each year (2019 to 2020) compared with approximately 30 million annual rail journeys. So instead of focusing on the decline we really need to switch our thinking to how we can improve services in Wales and better meet the demands of Welsh citizens.  This will also help us towards our ambitious modal shift targets and creating a truly integrated transport system that is fit for purpose, encourages more people to use it and thus makes a positive impact to Climate Change. 

We also need to develop a system which works both for rural and urban areas and across Wales. Cities and larger towns currently have much more frequent services, though often far from what is required to provide the necessary alternatives to private car use. There is a need for better integration between local bus services and services such as educational transport (also known as learner travel), social care, community, health and demand responsive services. This would deliver a more comprehensive bus service for local communities, especially those in rural areas. 

To create a fit-for-purpose system we need to look at the existing system and the elements that may need to be changed. The UK de-regulated its bus services, in all areas outside of London and Northern Ireland, as part of the Transport Act 1985. Since de-regulation there has been wide recognition (as highlighted by an extract from the Department for Transport’s bus strategy, ‘Bus Back Better’, below) that the de-regulated system does not work, leading to many incremental steps to enable partial re-regulation in the form of market exemptions for coordinated fares and various partnership provisions. The current de-regulated system in Wales has created fragmented services and a lack of comprehensive collaboration amongst operators with regard to timetables, route maps, or ticketing, which paints a confusing picture for the public and does little to attract new customers to travel by bus.

The draft Regulatory Impact Assessment published alongside this white paper summarises the challenges facing the current system as follows:

  • there is a fragmentation of responsibilities for bus between multiple operators and local authorities with an associated difficulty of alignment in respect of common goals and policy-based outcomes
  • currently local authorities’ ability to manage bus networks is partial, so bus public transport systems are not subject to transport planning as would typically be the case for, for example, road network improvement
  • bus service lines are typically operated as a set of discrete services with limited co-ordination with other services – as no single organisation has the appropriate capability and directive powers to manage this co-ordination
  • even before the COVID-19 pandemic, Welsh Government funding accounted for over half of bus operating costs in Wales, but is largely directed to operators without linkage to any long-term improvement strategies; and
  • although multiple operator tickets are feasible to implement under the current arrangements, operators would continue to provide their own tickets, which ultimately fails to provide customers with the simplicity of a single ticketing product. Furthermore, any significant market penetration by a multi-operator ticket will also bring a need for a complex revenue redistribution system to different services and operators, that would likely need continual re-negotiation in response to changes to road conditions, land use, service frequencies etc.

The latest bus strategy from the Department for Transport: Bus Back Better (p.20) notes the following example of some barriers to delivering better bus services

Limited cooperation

In a busy seaside resort, there are two sizeable rival bus networks that don’t acknowledge each other’s existence:

  • they publish separate city maps, showing only their own services, giving potential users including visitors the impression that some areas of the city are completely unserved
  • they use the same route numbers for entirely different routes
  • on the busiest routes, served by both operators, there can be overcapacity at certain times of the day.

There is a multi-operator ticket, but it is more expensive and hard to find out about.

On numerous routes across the country, evening and daytime services are operated by different bus companies, many of which do not acknowledge each other’s existence or even accept each other’s tickets. Some operator timetables don’t display each other’s services, which gives the impression there are no services at different times of the day.

The market system works to maximise short term commercial profits and fails to maximise benefits for passengers or to maximise broader social, economic and environmental benefits that are a priority for public authorities and government. Bus use in London, where de-regulation did not occur, held up substantially better than the rest of the UK, even prior to substantial investment to improve bus services after the turn of the century. Some of the differences are set out below. Fully regulated governance of all modes of public transport in northern European countries such as Germany, Austria and Switzerland, delivers two to four times the number of public transport journeys per capita per year than areas of the UK with comparable population density.

London bus franchising


  • London was not subject to the same deregulation of the bus network by the Transport Act 1985. Buses in London are governed by the Greater London Authority Act 1999 (chapter four (Public passenger transport) (sections 173-178) of the Greater London Authority Act 1999 sets out how public passenger transport services are provided for in London).
  • In London, Transport for London (TfL) specifies what bus services are to be provided. TfL decides the routes, timetables and fares. The services themselves are operated under contract by private companies through a competitive tendering process.
  • TfL is accountable to the Mayor of London
  • Since 1986:

 Rest of the UK

  • The Transport Act 1985 –introduced deregulation of bus services throughout Great Britain. Deregulation of the busses has led to a free market - anyone (subject to minimum safety and operating standards) can operate bus services. Public transport remains under direct control in Northern Ireland
  • bus operators are free to run services they want to set the fares they want and choose the vehicles they will use
  • uncoordinated network
  • array of ticketing options
  • the five large companies that, across most of the country, have each achieved local dominance (Arriva, First, Go-Ahead, National Express and Stagecoach), rarely compete head-to-head with each other.
  • operators focus on the most profitable journeys
  • local authorities have to pay operators to run journeys and routes that are socially necessary without full knowledge of route profitabilities and without the ability to maximise synergies across commercial and subsidised services
  • patronage nationwide has been in long-term decline, bar some local exceptions.

Public support given in both revenue (concessionary reimbursement, bus service operator grants and support for socially necessary services) as well as capital measures, such as bus lanes, interchanges, infrastructure and in some cases, fleet.

Public funding for bus services in Wales, even prior to the COVID-19 pandemic, has been considerable, including over £100 million of direct support each year through the Bus Services Support Grant, concessionary fare reimbursement and locally tendered services. This rises to over £220 million each year for the wider system (including some taxi and community transport) when you factor in additional publicly supported transport services. This covers non-emergency health transport, school transport, the TrawsCymru bus service, bus grants and reimbursement for the Mandatory Concessionary Fares scheme. As noted above, this is based on estimates prior to the COVID-19 pandemic, where significant additional funding has been needed to compensate the industry for the loss of passenger revenue.

Current legislation, subject to the Welsh Ministers commencing the relevant legislative provisions, would allow local authorities in Wales to enter into Quality Contracts Schemes (QCSs) (sections 124 to 134B of the Transport Act 2000). These are a form of franchising which enable local authorities to dictate what bus services are provided in an area and let contracts for the provision of those services.

However, the current QCS process is overly complex and resource intensive. Only one QCS has been attempted in England (Nexus Tyne and Wear) and none in Wales. This scheme failed to obtain approval from the relevant QCS board led by the Traffic Commissioner. The process was costly, taking around two years. History has shown that these provisions are insufficient to deliver the scale of change we need to see in the design and planning of our public transport systems, and that legislative change is needed to deliver the quality-of-service people need, at the pace the climate emergency demands.

The following summarises the challenges and issues around the current provision of bus services in Wales:

A summary of the challenges and issues around the current provision of bus services in Wales

Problems associated with de-regulation:

  • de-regulated industry with over 80 bus operators in Wales
  • multiple operators cause a lack of co-ordination, on both a local and national level. Including, but not limited to, routes; ticketing (especially non-interoperable tickets); and integrations with rail and active travel networks. This results in a suboptimal service and is confusing and off putting for passengers
  • lack of an overall guiding mind function with power to provide coordination between services and with different models such as rail
  • routes fail to respond to changing passenger needs, from short / retail-based journeys to longer journeys
  • limited stability in routes and destinations over time 
  • lack of simplicity on journeys, bus numbering, tickets, fares, signage
  • variable standards of vehicles, infrastructure, passenger information
  • inconsistency of branding and lack of overall network identity
  • marginal services switch between commercial and non-commercial over time, making strategic network planning difficult.

Further issues

  • declining passenger numbers
  • ageing workforce threatening a potential lack of skilled drivers in future 
  • reduction of commercial services in some areas has resulted in increased pressure on local authorities to support socially necessary services
  • evening and weekend services that require additional subsidy
  • need to set and deliver decarbonisation targets
  • bus emissions from diesel vehicles contribute to poor air quality, with coordinated improvement of the fleet needed
  • absence of real-time travel information provision in many areas
  • bus services that fail to reliably arrive as timetabled due to congestion and lack of bus priority measures to get past congested traffic.

Ultimately people need bus services that get them where they need to be when they need to get there, on buses that are safe, clean, reliable, punctual and affordable.  They also want the buses they travel in not to worsen local air quality and not to produce carbon emissions that worsen climate damage. We want to see Wales using ultra low emission buses as soon as practicable.

The draft Regulatory Impact Assessment published alongside this paper sets out key success factors for a better bus system, including:

  • area-wide networks with all significant local destinations reachable
  • one ticket system
  • easy to understand network
  • one brand
  • easy and reliable transfer
  • reliable travel times
  • accessible and comfortable
  • public feedback and customer care
  • passenger safety, security and health
  • network efficiency and financial affordability.

The proposals set out in this white paper have passengers as the focus. Bus services must be usable, attractive options to a far greater range of people than at present. This means improvements to where and when buses run; dedicated space on roads to speed them past congested traffic; and improvements to the vehicles themselves, to bus stations, to bus stops, to information and to ticketing.

Our priority is to provide the services that people want and to encourage more people to use buses. In particular, we want drivers of cars to have affordable, convenient, quick, safe and clean alternatives to driving. 

Clear, high quality, and up-to-date information is essential for people to understand the services available to them. People have far greater expectations of the quality of information that should be available than even a few years ago, and consumers expect to be able to make informed choices based on easily available information.

As well as improvements to passenger information we want to see fundamental improvement to ticketing. Currently, tickets are often not transferable across operators or modes of transport, and we believe this limits the attractiveness of bus as a means of travel and must be addressed. People should be able to make journeys with just one simple ticket that gets them where they want to go, whatever combination of services they need to take to get there.

Reducing our carbon impact

The climate emergency is a global challenge requiring urgent action. Net Zero Wales Carbon Budget 2 identifies that if we are to respond to the climate emergency then this must be a decade of action in Wales, and that we need to make more progress in the next ten years than we have in the last thirty. Transport has a significant role to play in helping Wales reach net zero and generating wider benefits across health, air quality, accessibility and the economy.

The current fragmented public transport system does not result in the best services for passengers. Enabling people to switch from private cars to lower carbon modes of travel will be important to meet our near-term carbon budgets. This will be enabled by developing an integrated, multi-modal public transport system, which results in a seamless and effortless experience for passengers.

In taking action and making changes to transport it is recognised that there must be a just transition so that we leave no-one behind, and the impacts of change are distributed fairly. If we are to live up to these objectives then being able to offer people real travel choice, and not exclude those who may not be able to afford to invest in an electric car, or cannot drive, is critical. Consequently, we will put people and climate change at the front and centre of our transport system.

There are multiple ways in which carbon impacts of transport, including buses, can be reduced:

  • reduce the amount of travelling
  • reduce the number of journeys made by car
  • promote a habitual switch from cars to buses (and other public transport, walking and cycling)
  • boost the number of people using each bus
  • promote a switch to buses with zero tailpipe carbon emissions

We need to achieve modal shift through more people using public transport, walking and cycling rather than the use of private cars. Based on our current analysis, the Welsh Government has set a target of 45% of journeys to be by public transport, walking and cycling by 2040. The current modal share is estimated at 32% (These are estimates based on the English National Travel Survey, with disaggregation by rural-urban categories, weighted to match the proportion of people living in each rural-urban category in Wales). Improving bus services will be critical to encourage people to make this change.

Llwybr Newydd: the Wales Transport Strategy 2021 sets out that in 2018 transport was responsible for 17% of greenhouse gas emissions in Wales: 62% from private car use; 19% from light goods vehicles (LGVs); and 16% from bus and heavy goods vehicles (HGVs). Switching from a fleet of buses which use fossil fuels to a fleet which uses battery electric, or fuel cell electric (using green hydrogen) will contribute to reducing carbon emissions; and to reducing the emissions of pollutants which can affect local air quality, harming public health.

We will encourage people to make the change to more sustainable transport by making it more attractive to all parts of society (One Network), adopting innovations that make it easier to use (One Timetable) and making it more affordable (One Ticket).

Whilst not explicitly covered in our proposed legislation, we will need to work with the industry within the proposed regulated system to ensure the design and construction of bus depots enable the re-charging and re-fuelling of electric/hydrogen powered buses. Depots, bus stations and bus shelters should, wherever practicable, use solar or wind power (or other renewable energy) to generate electricity for lighting, heating, electronic displays etc.

Question 1

Do you agree that change is required in how we deliver bus services to meet the needs of Wales’ citizens and respond to the climate emergency?  Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Legislative proposals

To deliver the objectives set out at the start of this paper, we need to change the operating model for our buses in Wales. This is centred around the need to deliver a bus system which maximises the benefit to the public.

We have considered various options for change, which are set out in more detail in the Regulatory Impact Assessment, including an Enhanced Partnership model that was introduced in England in 2017, a no change baseline, and the impacts of significant further change and investment beyond legislation. However, these partnership arrangements are voluntary and, after 5 years, there is only set to be a significant growth in Enhanced Partnerships as a result of a decision to remove bus funding from areas without one (Department for Transport' Bus Back Better National Strategy (2021) has set a deadline that from April 2022, LTAs will need to have an Enhanced Partnership in place, or be following the statutory process to decide whether to implement a franchising scheme, to access the new discretionary streams of bus funding). Crucially, such a system does not allow us, quickly and surely, to deliver a ‘One Network, One Timetable, One Ticket’ system across Wales that works alongside trains. We believe that to achieve the pace and certainty that the climate emergency demands of us bus networks in Wales need to be franchised. That assessment concluded that, even taking the conservative (i.e. high) cost estimate of implementing franchising at the individual local authority level, the benefits available from franchising outweigh those delivered either by partnership models or the current legislative framework. It also shows that if significant wider investment is made in the bus system, franchising continues to deliver more benefits than partnerships as an alternative.


What we mean by franchising is that Local Government, Transport for Wales and the Welsh Government will work together to design bus networks and services which best meet people’s and communities’ needs within the funding available. The franchising authority specifies the services and how they will run, including routes, vehicle standards, timetables, fares, branding, passenger information and ticketing. Operators will then bid for contracts to run these services, competing in a tender process to deliver those services as efficiently and effectively as possible rather than competing for passengers at bus stops. Other operators are then unable to register routes within the franchised area. The scale at which contracts are let for services will be determined on a case by case basis from individual routes to entire local networks.

There may be a need for commercial services to be licensed in addition to that contracted network, particularly to ensure cross-border connectivity with England whilst maintaining consistency with other services in Wales. This will allow the franchised system to support that key connectivity for many of our communities, ensuring cross-border networks receive the same level of network, timetabling and ticketing coordination in Wales whilst only specifying the standards for the Welsh portion of cross-border services so as not to impinge upon the governance of bus services in England. For operators, this would mean that cross-border routes operate similarly to the current system, but would be subject to additional standards on the Welsh side, and would require approval to ensure they complemented the rest of the network. 

Whilst other models have been attempted elsewhere in the UK, and proposed previously in Wales, we have to recognise the scale of the challenge facing us. Over the last 20 years significant efforts have been made, both within our existing legislative framework and through statutory partnerships in England, to improve bus services. However, nothing has come close to delivering the scale, and certainly not the pace, of change we need to respond to the climate emergency. The analysis set out in our draft Regulatory Impact Assessment, published alongside this paper, highlights the need for some form of overall control to ensure a well-planned, easy to understand network; for a single easy to use ticketing system; and for reliable, universally branded services.

A key element of this approach is that contracting services in this way allows the public sector to control the ticket revenue, paying operators a fixed fee with opportunities to include incentives to reward high quality services and reliability, and penalties for failing to meet certain service standards. This means that choices can be made in the public interest about whether unprofitable routes are still worth running and how to reinvest income from profitable routes to support those socially necessary services.

Whilst this may limit the profit operators are able to make from some routes and networks, it also ensures they can run services with a reliable income without bearing a revenue risk in the case of patronage falling due to economic downturn or other factors. Under a franchised system, the public sector assumes that risk to enable us to deliver the best network we can with the funding available.

Beyond legislative change, a contracted model also allows us to set minimum contractual standards. This could apply both to services and to staff pay and conditions, in line with our Economic Contract, ensuring that competition for services doesn’t come at the expense of supporting and growing the bus driving profession.

This does not mean, particularly initially, that we will be able to afford to run the ideal network, and that everybody will be able to get what they want from the bus system. However, we are committed to developing as effective and reliable a bus network as we can, and we believe the proposals in this paper set the framework for us to do that. We will need, in parallel, to carry on working on the wider system including demand responsive transport to provide a reliable, affordable travel option for everyone in Wales.

Franchising will allow us to design and contract networks that get people where they want to go, it will allow us to plan reliable timetables, which are stable over time so people know when they can get a bus, and it will allow us to introduce simple multi-operator ticketing, so people don’t have to navigate different operators’ offers, don’t need to buy multiple tickets for the same journey, and can focus on getting where they need to go. This is about creating a bus system that people can rely on to get them where they need to go.

As set out above, these key service improvements, along with others highlighted in this paper, will make services more efficient and attractive, offering a much improved service to people who rely on buses, and encouraging and supporting people to shift from private cars to public transport; a critical objective set out in the Wales Transport Strategy and Net Zero Wales to meet our climate targets.   

Question 2

Do you agree that franchising is required to deliver the depth and pace of change to the bus network that is required in the context of the climate emergency?  Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Embedding local knowledge and accountability

Local Government is central to the bus system. We rely on local knowledge to identify the services which are critical to communities and local authorities provide key services coordinating transport to schools and for care. Sustaining local accountability for identifying and prioritising those services is a key objective for us in this process.

We also know that people don’t stop at local authority borders, so we need to find a way of embedding that knowledge and accountability in a system that joins up bus services regionally and nationally, and links them into other transport options such as rail and active travel, to develop the right network for the whole of Wales

This points to a key role for Corporate Joint Committees (CJCs), mirroring their transport planning role, to form a regional view of the network and ensure inter-regional routes and communities are as well served as those within a single authority.

Established under the Local Government and Elections Act 2020, Corporate Joint Committees (CJCs) are bodies formed from the membership of principle councils, established in statue, and able to directly employ staff, hold assets and manage funding. Corporate Joint Committees are intended to enable selected functions to be delivered more effectively and strategically at a regional level, making more efficient use of valuable resources. The model is designed to offer maximum flexibility, with detail being developed through regulations co-produced with local government.

We believe the best way to achieve the kind of national level co-ordination and network design needed to maximise the public good across Wales is to bring those regional leads together with Welsh Government and expert input at a national supervisory board which can offer a guiding mind, bringing all levels of the bus system together to achieve that objective.

Under this model, local authorities would develop a plan for a bus network that meets the need of their communities. CJCs would then be responsible for bringing these together to agree a regional plan. Transport for Wales would work with them, on behalf of the Welsh Government, to combine these networks into a national plan to be reviewed by the members of the supervisory board and agreed by Ministers. At each of these stages we would expect Transport for Wales to offer specialist network planning support and work with local authorities and CJCs to help develop their plans and ensure they are well integrated with rail services across Wales.

Our current proposal is that this board must include representation from each of the Corporate Joint Committees to feed their regional perspective into the overall plan and to ensure inter-regional join up. It should also include the Welsh Government, who are responsible for national transport strategy, for overall funding levels, and for Wales and Borders rail services through Transport for Wales.

That final plan should also be informed by expert and public views on bus services, to ensure it is considering a range of perspectives. We are currently proposing that this includes an operator representative, a staff representative, and a public transport user representative who would sit on that board. We are not proposing to set out specifically in primary legislation who these representatives should be, but we will expect the board to give regard to their views and allow, by regulations and guidance, more detail to be set out on exactly how that representation will operate. This will allow the representatives on the board to properly reflect the composition of the industry, workforce and passenger body at the time, without tying a future board to a model designed for the industry as it stands in 2022.

To effectively implement the overall franchise plan, we are proposing to develop a new national centre of excellence for franchising contracting through Transport for Wales, giving all parts of Wales access to the same specialist resources to tender and manage high quality franchise contracts. To ensure this national level contracting scheme operates effectively we are proposing that the franchising power sits with the Welsh Government, so that Transport for Wales can work with CJCs and local authorities to discharge it on the Welsh Governments behalf. This would have the additional benefit of aligning the powers with rail services, allowing us through Transport for Wales to make plans for services, ticketing and journey information for bus and rail side by side. This will allow us to avoid duplication of publicly subsidised bus and rail services wherever possible and focus on offering people a better integrated overall public transport network, including strengthening the case for investment in rail services where bus networks can be planned to complement rather than compete with them. It also enables coordination with the long-distance TrawsCymru bus services and Fflecsi demand-responsive bus services that are overseen by Transport for Wales on the Welsh Ministers’ behalf.

However, to ensure local input, Welsh Ministers would have a statutory duty to consult the members of the proposed supervisory board on franchising plans and would have to report on and account for any departures from their recommendations.

We are also proposing to allow Welsh Ministers to delegate the franchising power. We are not expecting to do so, but this future-proofs the primary legislation against unplanned changes to delivery structures, so that powers could be delegated to a statutory delivery body, should it be deemed appropriate in future. We would consult on any further changes to CJCs’ responsibilities to ensure they reflected an agreed understanding of the appropriate role for CJCs.  

For this model to work in practice, plans developed at each level of the system will need to be affordable within an overall model. We are proposing to create a duty to ensure that affordability is considered when developing network plans, both at the regional and national level. This would mirror, for example, a similar model created in the Railways Act for infrastructure improvements, which creates a duty to consider affordability and sustainable funding. In practice the Welsh Government will need to work with local authorities through Corporate Joint Committees to discuss and agree funding envelopes to ensure they can plan against, ensuring that decisions can be taken throughout the system, both to contribute the right level of investment according to an area’s needs and to maximise that investment by designing the best possible bus services within the budget available. Whilst it is not required by the legislation, under the Railways Act model, the Secretary of State publishes a multi-year Statement of Funds Available to provide a basis against which this duty can be fulfilled.

Under the current devolved funding settlement, we are unable to provide the kind of long-term funding certainty such a system would ideally receive, but we will work with Local Government to develop an indicative funding envelope against which they can plan, to ensure we are all working towards the same objectives and planning the best bus network we are able to deliver within that budget.

This model would generate the following benefits for each level of the system:

Passengers will have:

  • a new bus system, where Welsh Ministers are supported by a guiding mind that can coordinate delivery bodies to implement ‘One Network, One Timetable, One Ticket’ and use investment with maximum efficiency to increase and improve their bus services
  • a passenger voice to input passenger priorities at the highest level as part of the supervisory board guiding mind.

Local authorities, directly and with their input through their Corporate Joint Committees, will have:

  • the ability to design bus network plans that best meet their communities’ needs
  • a major say in national decisions about the shape of the franchising system and its operation
  • transport for Wales working with them, on behalf of the Welsh Ministers, to help deliver their local-regional needs and priorities with maximum efficiency of resources and expertise
  • a substantial say in the distribution of services and national investment from Welsh Government across CJCs / LA priorities.

Welsh Government will have:

  • a bus governance system able to design a bus network fit to address the climate emergency, and capable to fulfil wider environmental, economic objectives and social policy objectives with maximum rapidity and lowest cost
  • the ability, through Transport for Wales, to coordinate bus and rail to create a multimodal integrated ‘One Network, One Timetable, One Ticket’.

Bus operators will have:

  • a clear vision for the future of the bus network following the COVID-19 pandemic
  • maximum patronage uplift and consequent expansion of the bus industry through optimisation of network attractiveness as ‘One Network, One Timetable, One Ticket’
  • collaborative working through a seat at the top table of the supervisory board guiding mind plus expert exchange at network design level
  • removal of market uncertainty risk through the franchising authority by means of gross contracts (i.e. the Welsh Ministers will take the ticket revenue and with it the revenue risk).

Bus company employees will have:

  • collaborative working through a representative seat at the ‘top table’ of the supervisory board guiding mind
  • better protection against a race to the bottom with the franchising authority able to set contractual conditions for all franchise competitions, in line with our Economic Contract.

This model ensures that local authorities can work together regionally through Corporate Joint Committees to plan the services their communities need, and then have a meaningful say in how Welsh Ministers combine regional networks into an overall bus system designed to maximise the benefits it generates for people in Wales, contracting with economies of scale and ensuring the whole country has access to the same skills and expertise. This highlights the importance of collaboration and co-design, with all levels of government in Wales working together to best serve our communities, in line with the Ways of Working set out in the Wellbeing of Future Generations Act.

Question 3

Do you agree with the Welsh Government’s preferred franchising model as described above? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 4

Do you agree that this model provides sufficient local input for designing local bus networks? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 5

Do you agree that there is a need for regional consideration and coordination of bus network plans by Corporate Joint Committees, before combining them at a national level? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 6

Do you agree that letting and managing contracts at the national level by the Welsh Government through Transport for Wales offers the best opportunity to pool franchising expertise, deliver economies of scale? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 7

Do you agree with the need for a duty to ensure plans are designed to be affordable? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Additional requirements, regulations and guidance

Primary legislation will set the structures for franchising, but there will be a lot of additional detail required to ensure implementing franchising is a success. Some of these issues will need to be dealt with in the Bill, ensuring that franchising powers are exercised to support the long-term growth of the industry. Other detail will need to be set out in further regulations and guidance to ensure franchising is implemented well, which is set out below.

We are aiming to maximise the effectiveness of franchising both in providing high quality public transport services and growing and sustaining a healthy market to deliver bus routes. That includes having a range of SMEs and municipal operators as well as the large commercial operators who can bid to run franchise contracts. The majority of this will rely on the contracting approach, ensuring there are attractive opportunities for all types of operators to compete for. However, we are particularly conscious of the risk franchising poses to smaller operators. We are working with Transport for Wales and operators to consider how to ensure zero emission buses and appropriate depot facilities could be available to smaller operators, to reduce the barrier to market entry and capital risk of bidding for contracts. We are proposing that when exercising franchising powers, all feasible steps should be taken to seek to ensure that franchising plans and forms of contracts used to operationalise them will give small and medium sized bus operators an equal chance to compete with corporate players and will support a healthy SME sector. We are proposing that this includes a specific legislative duty to consider the impacts on SMEs when franchising.

Other franchising models, such as in rail, include provisions in case of operator failure to allow an Operator of Last Resort to step in and run services (An operator of last resort is a business in the United Kingdom that operates a franchise if an operating company is no longer able to do so). Even before the crisis of the COVID-19 pandemic this power had been used on multiple occasions to ensure trains kept running after a franchisee in financial difficulties withdrew from a contract. We are proposing to create a similar provision, whereby a public service operator, which might for example be a locally owned municipal operator or Transport for Wales at a national level, could step in should a franchise fail and make sure buses keep running.

We are also proposing to give the Welsh Ministers powers to make regulations and guidance in relation to franchising, setting out key objectives we consider are necessary to successful franchising and to support the long-term growth of bus services and the bus industry, especially should powers to franchise be delegated in future. We expect that this should include:

  • regulations for dates by which network plans of routes to be franchised should be prepared to ensure rapid transition to new arrangements
  • guidance on minimum quality standards for services, detailed through contracts
  • guidance on expected service frequency standards, detailed through contracts
  • guidance for permits or other requirements for routes crossing the boundary of the franchise area
  • decarbonisation requirements, such as targets for decarbonisation of buses,
  • regulations to ensure consistency of fares and coordinated ticketing
  • regulations on the provision of clear, high-quality and up to date information on bus services, both to ensure passengers can make easy, informed journey choices and to support the development of network plans
  • guidance for how bus network plans for franchising should be prepared including co-production with operators and communities, and consideration of wider policies such as planning and learner travel 
  • guidance for how the bus network integrates with other transport modes.
  • guidance for the letting of franchise contracts to include:
    • how the franchise contract procurement strategy addresses the Welsh Government’s policy such as supporting SMEs and the foundational economy.
    • standard franchise contract terms, including minimum terms of staff pay and conditions, in line with our Economic Contract.
    • good practice principles for contract procurement strategy.
    • transitionary requirements for moving between franchise contracts

These guidance and regulations will also offer the flexibility to consider how best to implement franchising in different parts of Wales, ensuring that appropriate service levels are delivered both in rural communities and in city regions and considering the make-up of the bus industry in the relevant area.

Question 8

Do you agree that the proposed powers to make regulations and guidance are suitable to ensure franchises are let successfully and sustainably? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 9

Do you agree with the proposed requirement to consider the impact on SME bus operators when franchising? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 10

Do you agree with the benefits of establishing a mechanism to allow a public service Operator of Last Resort to ensure services keep running if a franchise fails? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

School transport

This white paper consultation is not setting out any proposals for changes to the Learner Travel Measure, which governs the provision of school transport by local authorities, however our intention is to take forward a full review which will be subject to consultation in due course. Consequently, we are not seeking comments on the Learner Travel Measure at this point. However, the ability to shape the network planning process will allow local authorities to maximise alignment of public and school transport services wherever it is appropriate and efficient to do so, whilst retaining the power and responsibility to provide dedicated home to school transport for those pupils who need it.

Transition arrangements

Transitional arrangements will need to be put in place to ensure bus services continue, and continue to improve whilst the proposed legislation progresses and whilst franchises are being prepared and let, minimising disruption for passengers. We will work closely with operators, Local Government and Transport for Wales to make sure we move towards our vision and objectives over this period and prepare the way to transition to a high-quality franchised system. We anticipate creating a regulation-making power for Ministers to make provisions for a smooth transition.

Transitional regulations and arrangements may need to be include (but are not limited to): 

  • ensuring authorities and operators will be informed and given sufficient notice about changes  
  • ensuring existing contracts on services are seen out as necessary, or adapted to fit franchise arrangements where this is appropriate 
  • where team members of existing services that may be affected, should be protected via TUPE arrangements appropriate to each arrangement 

Question 11

Do you think further specific legislative provisions are needed for the transitional period until franchising is introduced? Please provide comments.

Municipal bus companies

Sometimes, local authorities receive few or no bids to run bus services, be they school services or contracted socially necessary services. This means either that services don’t run, or that they end up paying over the odds for a private operator to fill that gap because they aren’t allowed to run those services themselves except in very limited circumstances.

This problem was further exacerbated by the COVID-19 pandemic, where some bus operators considered ending bus services on certain routes and others survived only because of funding support from the Welsh Government. This highlighted the precarious situation that if a bus operating company failed, the local authority wouldn’t be able to protect services in their communities. They aren’t able to set up a new municipal bus company to run services directly except in very specific circumstances, and they have no alternatives if there aren’t any bids to run contracted services in their area, or if the only bids are unaffordable.

The Transport Act 1985 prohibits local authorities from running their own bus companies, except where:

  • a Local Authority was already operating a bus company when the prohibition came into force (Cardiff Bus and Newport Bus operate under this exemption)
  • a local authority only runs a small operation and has applied to the Welsh Ministers for an exemption from the general restriction (the number of vehicles permitted under this exception is currently 10) or,
  • a bus operator has failed to run a service as contracted under a Quality Contracts Scheme or a franchising scheme and the local authority has had to step in (the law permitting Quality Contract Schemes is not in force in Wales).

We are proposing to lift that restriction to ensure parity that will allow local authorities the powers to run services either in-house or via an arms-length company as part of the franchised network.

An arms-length bus company would manage services as an independent commercial organisation with its own management board. The main shareholder of the company would be the local authority, but it would not involve itself in the day-to-day running of services.

We are also proposing to allow local authorities to invest in or acquire bus companies.

In addition to removing a barrier to public investment, this would also allow the merger of two municipal bus companies, which could offer economies of scale or allow them to operate over a wider area. Under current rules, the local authority owners could not both remain shareholders of a merged company as it would count as investing in a new company. This actively inhibits collaboration between local authorities and prevents attempts to deliver services more efficiently where this can be done regionally.

Finally, municipal bus companies are currently unable to raise funds, either by borrowing or by selling share capital. This puts them on an uneven playing field with commercial competitors, an issue which was acutely highlighted during the COVID-19 pandemic, and which prevents investment in zero emission buses. We are proposing to relax those restrictions and allow municipal bus operators to raise funds on a level playing field, freeing up investment into the local bus services they run, and ensuring that there are no advantages under the franchised system.

In addition, the implementation of these reforms could also create an option for an Operator of Last Resort whereby a municipal bus company could, where viable, operate in a different part of Wales to provide network bus services should there be no bidders coming forward to tender for a franchise, or a franchisee ceases to operate part way through a contract term.

These provisions are designed to ensure a healthy and equitable bus sector, where all parts of the system, be they municipal, small, or corporate operators, are able to contribute as fully as possible to a network designed for the public good, according to their strengths.

Question 12

Do you agree that local authorities should be able to run bus services directly? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 13

Do you agree that local authorities should be able to set up arms-length companies to operate local bus services? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 14

Do you agree that local authorities should be able to invest in or acquire bus companies? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 15

Do you agree that municipal bus companies should be able to raise fund by borrowing or selling shares? Please score from 5 agree strongly to 1 disagree strongly. Please provide comments.

Question 16

Are there any additional safeguards you would like to see applying to the use of these powers? Please provide comments.

Question 17

Are there any further comments you would like to provide on the content of this white paper?

Draft regulatory impact assessment

We have published a draft regulatory impact assessment (RIA) alongside this paper, which aims to assess the evidence about the costs and benefits of delivering high quality bus networks through a franchising approach, and comparing with enhanced partnerships (such as have been introduced in England) and a baseline scenario.

The franchising scenario in the RIA is based on a notional scenario in which non-legislative measures, such as bus stop improvements, bus stations, bus priority measures, are not included as they are not directly required or affected by the legislation – to enable a neutral assessment of costs and benefits to be presented.

The legislative proposals are however considered as enabling measures, which would provide an enhanced ability to lock in benefits of wider, and potentially substantial, investments in measures such as on-street or bus station infrastructure, and bus priority measures. Hence the draft RIA includes a second scenario with investment beyond legislative change, which is aimed at producing significant benefits and patronage increases at a scale higher than the legislative proposals themselves.

The draft RIA considers the cost of a franchising model where each local authority is responsible for franchising services in their area. This provides a conservative resource cost estimate that represents functions duplicated over all 22 local authorities. This offers the advantage of providing a fair comparison to an alternative enhanced partnership model, simply on the benefits they can offer passengers, without considering the economies of scale available from franchising at a national level. It also has the advantage of providing a cost comparison that does not pre-suppose the outcome of this white paper.

Although this local franchising model is not the preferred policy approach set forward in this paper, which aims above to set out the benefits of taking a regional view of network plans and concentrating franchising skills at the national level, it has been adopted in the draft RIA to give a level playing field for comparison of the different forms of bus governance. Subject to the outcome of this consultation, the draft RIA will be updated to reflect the policy as it is presented in the proposed bill. We will also undertake some further analysis prior to the publication of the final RIA, including sensitivity analysis to test the robustness of the modelling results to changes in key assumptions and further consideration of the impact of the proposals on the bus sector and competition in Wales.

We would welcome any comments or feedback on the modelling contained in the draft RIA.

Question 18

Do you have any comments on the draft Regulatory Impact Assessment published alongside this paper?

Question 19

We would like to know your views on the effects that the proposals would have on the Welsh language, specifically on opportunities for people to use Welsh and on treating the Welsh language no less favourably than English.

What effects do you think there would be? How could positive effects be increased, or negative effects be mitigated?

Question 20

Please also explain how you believe the proposals could be formulated or changed so as to have positive effects or increased positive effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language, and no adverse effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language.

Question 21

We have asked a number of specific questions. If you have any related issues which we have not specifically addressed, please use this space to report them.

How to respond

Submit your response by 24 June 2022 in any of the following ways:

Bus Bill Team
Second Floor South Pillar B09
Welsh Government
Cathays Park
CF10 3NQ

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Further information and related documents

Number: WG44838

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