TfL Considers Launching Publicly Owned Bus Company in London

Transport for London (TfL) is exploring plans to establish a publicly owned bus company, which would compete with private operators across the capital. If created, it would be the first major publicly owned bus company in London for 30 years.

TfL’s draft business plan, which outlines investment priorities for the remainder of the decade, states:"We will develop detailed proposals for a new publicly owned bus company. We will assess how this could support innovation, efficiency, accountability, and meet the needs of customers and the workforce."

Under the current model, in place since 1995, private companies bid to run services on a franchise basis, usually for seven-year contracts, with income linked to performance. TfL sets the routes and controls fares, unlike most of the rest of the country where bus networks have been deregulated.

London’s 675 routes are operated by 16 private companies, including Arriva, Go-Ahead London, First Bus London, and Stagecoach London. Many of these operators have faced rising pressures in recent years due to slower travel speeds, higher operational costs, and tax increases.

Last week, Go-Ahead Group announced it would withdraw from several routes, citing financial unsustainability.

Managing Director Andrew Edwards said:"These routes are under-performing financially and cannot be maintained at a loss without putting pressure on the wider business."

Before his re-election as Mayor in 2024, Sadiq Khan pledged to explore creating a London bus company that would bring routes back into public ownership as existing contracts expire. He highlighted the potential benefits:"If a private company is making profit, would it not be better if it was run by us, reinvesting the profits into public transport rather than paying shareholders? It also provides a good benchmark when assessing bids from private operators."

Previously, legislation prevented local authorities from setting up new public bus companies, but the Bus Services Actpassed last October removed this restriction.

TfL’s draft plan also outlines broader investment ambitions, including:

• Extending the DLR to Beckton Riverside and Thamesmead.

• Expanding Superloop bus services.

• Investing in new fleets for the Bakerloo and Central lines.

  
  

Mayor Khan emphasised the wider benefits of these investments:"Investing in our transport network not only supports jobs and economic growth in London but benefits the whole UK. I will continue to make the case for long-term projects that could transform the future of transport in the capital."

The draft plan is set to be reviewed by the TfL Board on 4 February.