How bus franchising works: a practical guide for UK Authorities
Bus franchising gives a local transport Authority control of its bus network. The Authority specifies routes, fares, frequencies and standards, then contracts Operators to deliver them. It is the most significant tool available under the Bus Services Act 2017 and a large, complex and expensive programme.
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Bus franchising lets a local transport Authority take control of its bus network. The Authority specifies routes, fares, frequencies and standards, then contracts Operators to deliver them. It offers the clearest route to a coherent, passenger-centred network.
It is also a large, complex and expensive programme. This guide sets out the statutory process and explains how LiteFranchise™, a packaged route, can shorten timelines and reduce delivery risk.
What is bus franchising?
Under the deregulated model, in force across England outside London since 1986, commercial Operators decide which routes to run and set the timetable, fares and branding. The Authority can influence the network only through subsidy, partnership or information.
Franchising gives the Authority that role. It specifies the network and lets contracts to Operators to run services on its behalf. Operators are paid to deliver the service, while revenue and network-level commercial risk sit with the Authority.
The model is well established. Transport for London has run bus services on a franchise basis since the 1980s. Greater Manchester became the first English mayoral combined Authority to re-franchise under the 2017 Act. The Bee Network has rolled out in phases since 2023.
The legal framework: Bus Services Act 2017
The Act sets out the powers and statutory process. An Authority must:
- Prepare a franchising assessment that compares franchising against realistic alternatives.
- Commission an independent audit of the assessment.
- Consult passengers, Operators, neighbouring Authorities and other affected parties.
- Take a formal decision to franchise, supported by the audited assessment and consultation.
- Publish a franchising scheme and run a transition period before services start.
The five stages of the franchising process
Stage 1: Strategic case and assessment. The assessment is central to the process. It must compare franchising with credible alternatives, usually an Enhanced Partnership and a "do minimum" baseline, against the five areas specified in Department for Transport guidance: effectiveness, value for money, affordability, deliverability and the wider implications for the Authority. This stage typically takes 12 to 24 months and includes data gathering, network design, financial modelling and stakeholder engagement.
Stage 2: Independent audit. An independent auditor reviews the quality of analysis and assumptions in the assessment. The audit does not determine whether the Authority should franchise. It tells the Authority and the public whether the assessment is robust enough to support the decision. Allow time for audit findings to be incorporated into the assessment.
Stage 3: Consultation. A statutory consultation, typically lasting 12 weeks, makes the assessment, audit and proposed scheme available to passengers, Operators, trade unions, neighbouring Authorities, the Traffic Commissioner and others. The Authority must analyse the responses and reflect them in the final decision.
Stage 4: Decision and scheme making. The mayor or relevant decision-making body decides whether to franchise, taking account of the assessment, audit and consultation. If it decides to proceed, the Authority publishes the franchising scheme, which sets out the area, start date and transition arrangements.
Stage 5: Procurement and transition. Contracts are usually procured in geographic packages. Depots and assets are transferred or replaced, and drivers are TUPE-protected. Ticketing and fares are migrated and branding is deployed before the first franchised services launch. Most live programmes phase services in over 18 to 30 months to manage risk.
Costs, timeline and the affordability question
Published programmes have cost Authorities £10m to £20m to reach a decision. Once running, schemes incur ongoing costs in the tens of millions of pounds per year, offset by fare revenue and network savings.
Operator contracts typically last five years. For many Authorities, particularly those outside the largest Combined Authority areas, cost and duration are the binding constraint.
The LiteFranchise™ framework
ITA developed LiteFranchise™ as a packaged response to that constraint. It retains core elements of franchising: network specification, fare control, integrated branding and Operator accountability. It removes bespoke, repeated work that adds cost and time to each programme.
It combines a network specification approach, a contract template suite, a financial model, a delivery operating model and a technology stack for day-to-day network operation: TellUs, OneContact, 16Dashboard and IDInsight.
For Authorities still considering franchising, LiteFranchise can sit alongside the statutory assessment as a costed delivery option. This enables an Authority to answer "what would franchising look like here?" in months rather than years.
Useful questions
Before committing to a franchising programme, an Authority should ask:
- How does bus franchising work in practice? The Authority designs its network, setting routes, frequencies, fares and standards, and tenders contracts to Operators to deliver it. Operators are paid to run services to specification. The Authority keeps fare revenue and carries the network-level commercial risk.
- Which Authorities can franchise? Mayoral combined Authorities have direct access to franchising powers. Following the 2017 Act and subsequent reforms, other local transport Authorities can also pursue franchising, subject to government consent and the statutory process described above.
- What is the difference between franchising and an Enhanced Partnership? An Enhanced Partnership is a structured agreement between the Authority and Operators, with enforceable commitments on standards, fares and information. Franchising replaces the commercial market in the area with Authority-let contracts. Enhanced Partnerships take less time and cost less to establish, while franchising gives the Authority the strongest control of the network.
- How long does franchising take? Three to five years from the initial assessment to the first franchised services is typical. LiteFranchise is designed to shorten that timeline by removing bespoke design and procurement work from the critical path.
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