George Osborne made his first post-election speech last week, with the reinstated chancellor revealing plans for a 'Cities Devolution Bill' whereby English cities will get greater powers over housing, transport, planning and policing. Greater Manchester is expected to become a 'blueprint' for the new laws when it assumes these powers following the mayoral elections in two years.
This poses significant change for Britain's transport industry. Mr Osborne has said Manchester could introduce bus franchising, implying re-regulation will be permitted. While it could take up to three years for the changes to hit earnings at Britain's big four transport operators, (because cities would have to elect mayors in order to receive the package of devolved powers), brokerage Liberum has urged investors not to take the legislation lightly.
The regional regulation of bus services aims to mimic the London model where services were never de-regulated in the way they were in the rest of England. Regional councils have complained they are powerless to stop companies over-providing on city centre routes, which cuts margins so they cannot subsidise unprofitable, but socially necessary, buses. Many routes, they claim, run at 50 per cent capacity or less.