Bus Week: Where the nation’s privatised buses went

Published on 26 October 2011 in , , , , , ,

Back in 1986 a series of major changes began to happen to the bus industry in the United Kingdom. Deregulation was supposed to introduce competition and new thinking to the industry. As part of that plans were made to begin privatising the many bus companies that were owned by the state in various forms.

Given that most of the UK’s bus operators were publicly owned, it was a massive undertaking and took years to complete. The various companies were flogged off to a variety of owners including employees and various fledgling bus groups. But in the intervening 25 years, what has actually happened is that the UK’s bus market has come under the control of a handful of large companies.

So what actually happened to the UK’s publicly owned bus operations? With the help of Wikipedia and a bit of time, I set to find out some geeky stats and plot some funky pie charts.

There were actually more than a few different kinds of bodies that ran buses in the country, and the stats are broken down by each type.

One note on methodology here. Twenty five years is a long time and naturally many bus operations have changed in that time. Depots will be closed, routes sold off. What we’re looking at here is only what happened to ownership of the legal entity of the privatised company and/or its successors. Anything else gets too complex to contemplate.

The National Bus Company

LAG188V-SVV587W-2 240906 CPS

Photo by hha1241. Creative Commons licensed licensed.

The National Bus Company was probably the biggest bus operator in the UK and also included National Express coaches.

Despite the “National” in its name, it only ever served England and Wales. It was created in 1969 by merging the state owned “Tilling Group” (which had been nationalised in 1949) and the bus operations of the privately owned British Electric Traction.

After some periods of consolidation the group had 30 subsidiaries in 1981, but with many of these being large, several were broken up in preparation for privatisation and 52 different companies were sold off.

Where the NBC companies went pie chart

Many NBC companies were sold to their management but given the NBC’s dominance on the UK bus scene, it perhaps shouldn’t surprise us that its subsidiaries were keenly chased as bus groups were created and expanded. They were also amongst the first companies to arrive on the market with privatisation starting in 1986 and ending in 1988.

It probably shouldn’t surprise us to see that of the 52 companies, most went to three of the big bus groups with Stagecoach taking 16 companies, First 15 and Arriva taking 15½ (London Country North East was split into two operations with one now being owned by Arriva and the other by Transdev.)

Notably two companies have managed to remain independent – East Yorkshire Motor Services now owns a small bus group, whilst Trent Motor Traction merged with another local operator to become Trent Barton.

However most notable is the one failure. Sold to its management, National Welsh didn’t survive beyond 1992 after struggling to make money. Despite its size, no single buyer could be found and the company was broken up.

The above list does not include intercity coach operations although they were part of NBC.

Scottish Bus Group

HSD 73V Leyland Fleetline FE30AGR Alexander H44/31F Western SMT R73

Photo by Andy_Mitchell_UK. Creative Commons licensed.

The SBG was basically NBC’s equivalent operation in Scotland although actually pre-dates it having being set up in 1961 to take control of state owned bus operations in Scotland. Most of the companies came into state ownership at the same time as the Tilling Group in the late 1940s Prior to that, the big four railway companies owned a multitude of bus company shares and when the railways were nationalised, the bus companies came with them.

In 1985 it’s 7 companies were split in to 11 companies and were sold in the early 1990s. Whilst some were bought by management, many were sold direct to companies that would go on to become big names in the bus field.

Where the SBG companies went pie chart

It’s at this point that I should mention one notable fact. The two largest bus groups in the UK are both based in Scotland. Aberdeen based First Group partly grew out of former municipal bus operator, Grampian Regional Transport (more on that story later) whilst Perth based Stagecoach was originally an independent bus operator that ruthlessly grew and expanded during deregulation.

The single exception was Clydeside Scottish which ended up in the hands of Sunderland based Arriva.

Passenger Transport Executives

Manchester's open-top bus

Photograph by Gene Hunt. Creative Commons licensed.

The Transport Act of 1968 created the concept of Passenger Transport Executives and Passenger Transport Authorities. The idea was that in large conurbations like Manchester and Birmingham, it would make sense if all the local public transport services were coordinated by a central body.

Prior to this move bus operations in major conurbations were run by a variety of smaller council owned municipal operations but the PTEs saw these merged into a larger operation. In most cases only a small number of operators came together, but in Manchester a whopping 11 municipal operations were merged. Added to that, several PTEs also took over independent operators or some operations of their local National Bus Company subsidiary. Five PTEs were originally created with another two being added in 1974.

In some ways the successor companies of the PTEs should have been strong contenders to dominate the UK bus scene however the fact that their local markets were some of the largest cities in the UK meant that the competition from de-regulation was especially fierce. They were also relatively late to be sold, most being privatised in the 1990s and didn’t always have deep pockets for expansion. Had they been sold earlier on, access to private finance could have left them in a good position to cherry pick other operators.

In Manchester, GM Buses was deemed to be too big to be sold as one company and was split in to two operations: GM Buses North and GM Buses South (later becoming GMS Buses). Each of the PTE bus operations was sold to either management or staff. Most of them concentrated on their local areas but Merseyside based MTL expanded fast taking up two railway franchises and purchasing bus operations in London.

Where the PTE companies went

First Group ended up with control of 50% of the former PTE companies with Stagecoach taking 25%. Also here we see our first entry of National Express. The group was formed out of the intercity coach operation of the National Bus Company. Whilst once a bigger player in the bus and rail market, National Express now only own two bus companies.

London Buses

As mentioned elsewhere on this blog, London’s buses were never deregulated. However it was planned and as part of that London Buses, the biggest bus company in the country, was split up in to 12 companies in 1989 ready for sale. With the exception of one which was wound up, all were privatised five years later.

Where the NBC companies went

Here the chart helps reflect the true state of London’s bus market. There is no one (or two) dominant market player in the capital, and the large size of London’s bus market means that competition concerns would stop that ever happening.

But here’s an interesting thing to note. In 1989 London Buses was split into 12 companies. As part of increasing competition, many new companies were set up. Some were taken over, some took over others. And some folded. And today in 2011 there are 13 bus companies contracted to Transport for London to run bus services in the capital.

Municipal Bus Companies

Merthyr Tydfil 230 (JUH 230W)

Photo by iantherev. Creative Commons licensed.

Finally we get to the municipal bus companies. These were bus operators owned and run by local councils across the country – the ones not absorbed in to PTEs and where NBC operations were perhaps less dominant.

In 1986 there were 47 municipal bus operators (according to a list on Wikipedia.) Whilst all of them were basically moved to arms-length operations, independent of their owners, few were privatised initially with local councils preferring not to sell off the family silver and unlike the others, they were not forced to sell. However the resulting tale is perhaps the most interesting of the other types of operator we’ve looked at so far…

Where the municipal companies went

That Stagecoach and First got a fair chunk of the operators probably shouldn’t surprise us, but a whopping 25% of those municipal bus operators are still owned by local councils. These are the operators who successfully adapted, survived and grew to serve the community.

On the flip side, 12.5% of municipal bus companies didn’t survive. Nowhere else in this page have we seen such a high failure rate. Out of the six that are no longer around, two of them were sold off to a new owner that collapsed (National Welsh in both cases) but the rest folded or were wound up following intense competition.

What we also see here is a greater range of new owners including smaller groups like RATP, Transdev and Rotola.

There is one quirk in the above figures. It contains the only bus company to be privatised and then brought back in to public ownership. Fylde Borough Transport was sold to its management before being bought by neighbouring municipal Blackpool Transport a few months later. For the sake of the above, the combined entity is classed as two municipals.

So there you go

So here’s one final chart. It’s a combination chart of all the above. Note this just shows how many companies were bought – naturally we’re ignoring bus size.

Where the municipal companies went

What do we conclude from all this? Well we conclude that First and Stagecoach between them ended up owning about half of the bus companies that were privatised, with Stagecoach ending up with the greater share. In comparison it’s First that is the bigger operator with 20% of the UK bus market compared to Stagecoach’s 16%.

We also conclude that where once the state owned most buses in one form or other, now a small handful of bus groups do. But we knew that anyway.

We can conclude that of all the groups privatised, only the municipals seem to have a greater breadth of new owners. And we can see that out of all the companies privatised, just two have managed to remain independent.

Deregulation was supposed to be bring competition. But with most of the UK’s publicly owned bus operations getting into the hands of a handful of larger bus empires, there really isn’t that much competition any more. Instead the nation flogged off its silver, or for some local councils, saw someone break into their house and attempt to destroy the silver so it became essentially worthless.

And so a state monopoly where services were run for the good of the people, was replaced by one run for the good of the shareholders. Still it’s all about ideology. And the Conservative Party ideology was, as it still is, that private sector good, public sector bad. So by judging de-regulation on that basis, the whole thing has been a massive success! Congratulations all round.


  • Francis Cook says:

    So… going back in time, prior to 1939, were buses publicly operated or privately operated ?
    My submission to you is that this pre-occupation with state owned entities is a relatively modern thing that is a hang over from the necessity of the post war period.

  • Andrew Bowden says:

    Well if you were standing in London in 1933 you’d be admiring your newly state owned bus and tube operations!
    Exact proportions I don’t know. Most of the National Bus Company subsidiaries can be traced back to private operators, including the railway companies (as I recall the Tilling group’s bus companies ended up in state hands in 1948 thanks to the shares owned by the railway groups.) On the other local councils had been setting up public transport operations since the very beginning of the 20th century. So in the 1930s… Half and half perhaps? Wouldn’t surprise me.
    I’m not too fussed about private vs public myself. Both can, in theory, be good or bad. The bigger issue is state “controlled” or not. Private sector competition hasn’t led to huge passenger growth. On the other hand London’s regulated system has.

  • Alex says:

    My submission to you is that this pre-occupation with state owned entities is a relatively modern thing
    Very true. Are you sure your pre-occupation with Edwardian private sector solutions isn’t hopelessly out of date?

  • James says:

    One minor correction: deregulation did not occur across the whole of the UK. Translink, and it’s subsidiaries NI Railways, Ulsterbus, Goldline and Metro are still the principle public transport providers in Northern Ireland, and are all state owned.

  • Andrew Bowden says:

    Ah James, you need the footnote on the article published the day before 🙂