Stagecoach East outed itself as the bus operator who won a tender to run 7 new bus routes in Cambridgeshire but had the agreement torn up after Cambridgeshire and Peterborough Combined Authority refused their 11th hour bid for more money to run them.
Darren Roe, managing director of Stagecoach East blames “inconsistencies in the award letter” and the increase in National Insurance costs for the need to raise their tender offer.
Mayor Dr Nik Johnson is fuming and says the contracts were awarded in good faith to Stagecoach “and they should gone ahead and delivered them”.
He says Stagecoach’s request for more cash was revealed to a meeting of all local council leaders on Wednesday.
In a press statement today, Stagecoach East claims to have been “proud of its consistent track record in working in partnership with CPCA, to help deliver the Mayor’s vision for bus services” although the company will be affected if, as expected, bus franchising is agreed for the county.
This would produce major changes to the way bus services operate whereby the Combined Authority would contract bus operators to run services on its behalf but have control over the routes, frequency, fares, and overall standards of the region’s buses.
“An alternative enhanced partnership solution, while producing benefits over the current bus service, provides less control over the routes, frequency and overall delivery of the services,” says the Combined Authority.
The outcome of a public consultation – which attracted more than 1,600 responses – is to be discussed and the issue decided shortly. The consultation began on August 14 last year and ended on November 25.
If the results are positive final approval could come as early as February despite calls by the Conservative leader of East Cambridgeshire District Council, Cllr Anna Bailey, to postpone a decision until after the Mayoral election in May.
“Is it just me or does anyone else think it is quite wrong for the Mayor to take such a far reaching decision so close to the Mayoral election?” she tweeted recently.
If the Mayor wins approval from the Combined Authority board it will be difficult for any change in leadership to reverse the decision, particularly if the consultation outcome supports franchising.
All of these issues, and the impact such a change would have on bus operators hover in the background of the shock by Stagecoach, the county’s largest provider, and the subsequent row over the 7 services now being re-tendered.
The term force majeure – an event or effect that cannot be reasonably anticipated or controlled – is being banded around in terms of Stagecoach and the 7 services it had successfully tendered for but then upped the price.
The company said it was “saddened yesterday evening to be made aware of a press release talking about an unnamed bus operator who has withdrawn its bids for new Tiger bus routes, which were originally due to start on the 29th of November 24”.
Mayor Dr Nik Johnson said that since 2022, when the first decision was made to step in and rescue almost two dozen services deemed unviable by their operators, the Combined Authority has procured more than 40 mayoral precept-funded routes.Its statement said that to “end the current media speculation, we wish to clarify the following.
- We have not withdrawn from the tender process, the decision to retender the routes was taken by the CPCA
- Inconsistencies in the award letter caused several delays in the conclusion of the contract and we worked at pace with the CPCA to try and resolve these.
- These delays and then the subsequent Government announcement on the National Insurance (NI) increase (which pushed up significantly the cost of provision) meant we asked for an increase in the tender prices to be considered
- We also identified concerns over the legality of operating a tendered service where a commercial one exists”.
Mr Roe said: “We remain committed to working with CPCA to deliver more bus services in Cambridgeshire and Peterborough but need the time and clarity in the procurement process to do this.”
A Combined Authority spokesman said: “In response to news that a bus operator – who cannot be named for legal reasons – has withdrawn all of its winning bids to run the final 7 precept-funded bus services, Mayor Dr Nik Johnson has moved quickly to reassure residents that their new routes would be up and running by the spring.”
The routes affected by the withdrawal of bids are:
Tiger 1 – Huntingdon to Cambridge
Tiger 2/3 – Cambridge North and South connections
Tiger 4/5 Soham to Cambridge and Newmarket to Cambridge
Tiger 7 – Chatteris to Wisbech
The routes are part of a package of 53 services funded through the Mayoral precept.
38 routes across the region are already up and running, with a further 4 Tiger on Demand services – flexible, bookable buses serving rural areas – set to launch this weekend, covering Fenland, East Cambridgeshire, and two in South Cambridgeshire.
Mayor Dr Nik Johnson said that since 2022, when the first decision was made to step in and rescue almost two dozen services deemed unviable by their operators, the Combined Authority has procured more than 40 mayoral precept-funded routes.
As a result of the withdrawn bids, the tendering process for the remaining 7 routes – covering places including Peterborough, Cambridge, Ely, Huntingdon, Wisbech and surrounding villages – has to start over, meaning the services are not expected to launch until May.
Darren Roe, managing director Stagecoach East: ‘We remain committed to working with CPCA to deliver more bus services in Cambridgeshire and Peterborough but need the time and clarity in the procurement process to do this’Mayor Johnson said: “I was very proud when this organisation stepped up to rescue the original 23 routes, and I am just as proud today to see the vast majority of mayoral-precept-funded services up and running, all serving parts of our region that an out-of-date deregulated market either couldn’t or wouldn’t.
Mayor Dr Nik Johnson: “On these last 7 routes, I know the delay is frustrating, but we’ve dealt with operator setbacks before and are working to get them going as soon as possible.”
The re-tendering process could pave the way for other operators to gain a stronger foothold ahead of bus franchising, but the reality is they may have limited capacity to competitively tender for all 7 services.
Getting the 7 affected services up and running – announced publicly – could be a game changer for Mayor Johnson ahead of May’s election.
Meanwhile Tory opposition candidate, former Peterborough MP Paul Bristow, blames Mayor Johnson for Stagecoach’s decision to ask for improved terms.
“Thanks to the Mayor’s bungling, passengers are going to miss out,” he tweeted. “If he is re-elected and he is put in charge of bus franchising, on his track record he could bankrupt Cambridgeshire and Peterborough,” he tweeted last night.
