Transport for London (TfL) has announced the establishment of a new publicly owned bus operating company named 'Buses for London', which will take over route 6 by late 2027 starting from Park Royal bus garage.
This is a follow-up to my previous article from June 2024.
From the TfL press release:
Transport for London (TfL) has today [Friday 25 September 2026] unveiled 'Buses for London', the capital’s trailblazing publicly owned bus company, alongside plans for its first route and operational base at Park Royal Depot in west London.
This marks a major milestone in TfL's transformational plans to establish a publicly owned bus operator for the capital, helping to support innovation, affordability and sustainability in one of the world's largest bus networks, while improving services for drivers and passengers alike.
TfL has also confirmed that route 6, which runs between Willesden and Victoria station, will be the first service to operate under the new name when ‘Buses for London’ launches in late 2027. A further four routes will be announced over the coming year, to come into operation from 2028.
As part of the Mayor and TfL’s wider work to reimagine the capital’s bus network, 'Buses for London' will explore new ways to deliver high-quality, reliable and sustainable services for customers. Buses for London will help TfL test new approaches to innovation, operational efficiency, safety, decarbonisation, customer experience and driver welfare, while maintaining the high standards Londoners expect from the capital's bus network.
TfL currently contracts bus services to eight privately-owned operators across the capital's almost 700 bus routes. The creation of a publicly owned bus company will afford TfL greater control over how services are run, enabling it to boost reliability and safety while crucially reinvesting profits to further improve the capital’s transport network. This proposal has been developed following engagement and collaboration with Unite the Union.
Buses are the most inclusive form of public transport in London, with 96 per cent of households within 400 metres of a bus stop and more than 90 per cent served by high-frequency routes. Buses and trams also offer the most accessible and affordable way to travel sustainably in the capital, with fares among the lowest in the UK and all bus routes served by low-floor vehicles with a dedicated wheelchair space, providing a vital lifeline for vulnerable Londoners and lower income households.
Park Royal Depot will become the first operational site for 'Buses for London' and will initially support around 100 zero-emission buses. TfL is working in partnership with the Old Oak and Park Royal Development Corporation (OPDC) to develop the site, supporting sustainable growth and improved transport connections across west and central London. The site is being leased until 2033, ahead of regeneration in line with the Old Oak Masterplan Framework, when TfL and OPDC will work together to identify a permanent location for the depot ahead of the lease expiry.
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Note: Most sections of this article were researched with the assistance of AI.
Brief History of Publicly Owned Bus Companies for TfL and Their Predecessors
The first time bus services in London were brought into public ownership was with the creation of the London Passenger Transport Board (LPTB) on 1 July 1933. Established under the London Passenger Transport Act 1933, the LPTB unified public transport across the capital by taking over the undertakings of the London General Omnibus Company (LGOC), the Underground Group, the Metropolitan Railway, municipal tramways, and dozens of independent omnibus operators under the unified 'London Transport' brand. Rather than purchasing these undertakings with direct cash outlays, the acquisition was financed through the issue of specialised London Transport Stock (comprising 'A', 'B', 'C', and London County Council stocks) totalling roughly £109 million in nominal value to compensate existing share and asset owners.
To prepare London's bus network for eventual privatisation and introduce competitive tender pressure, the London Regional Transport Act 1984 restructured operations. In April 1989, London Regional Transport (LRT) created a wholly-owned subsidiary, London Buses Limited (LBL), which was subdivided into 11 business units organised along geographical lines (such as CentreWest, London Central, London General, Leaside, and Selkent), alongside a separate coach unit. These units operated as distinct commercial entities, competing against private operators for route tenders managed by LRT.
The policy rationale for this structural shift was outlined in the 1983 Conservative Party Manifesto, which stated:
"We have already taken important steps to improve the standards of public transport. We have lifted restrictions on long-distance coach services. As a result, about one hundred new express coach services have been started, fares have been substantially reduced and comfort improved. We shall further relax bus licensing to permit a wider variety of services. We shall encourage the creation of smaller units in place of the monolithic public transport organisations which we have inherited from the Socialist past, and encourage more flexible forms of public transport. City buses and underground railways will still need reasonable levels of subsidy. But greater efficiency and more private enterprise will help keep costs down.
The GLC has grossly mismanaged London Transport. We shall set up a new London Regional Transport Authority for the underground, buses and commuter trains in the London area. This will provide the opportunity to split the different types of transport into separate operating bodies, put more services out to private tender and offer the passenger better performance."
1983 Conservative Party Manifesto
While deregulation was extended across the rest of Great Britain under the Transport Act 1985, full deregulation of London's bus network was repeatedly deferred. The 1992 Conservative Party Manifesto reiterated plans to deregulate and sell off the operating subsidiaries:
"Deregulating buses in London and privatising the London Buses subsidiaries. A new London Bus Executive will be responsible for bus- stops, stands and stations and for contracting out socially necessary services. The concessionary fares scheme in London will continue."
1992 Conservative Party Manifesto
Ultimately, full deregulation in London was abandoned due to concerns over traffic congestion and service coordination. Instead, the government retained the franchised route-tendering model while privatising the 10 bus operating subsidiaries of London Buses Limited between September 1994 and January 1995. As detailed in the National Audit Office report, The Sale of London Transport's Bus Operating Companies, the sale of these 10 operating companies raised gross proceeds of £233 million, which yielded £218.2 million in net cash settlements after working capital adjustments.
The last time a transport authority in London owned a bus operator was East Thames Buses. Established in 1999 during the final years of London Regional Transport following the financial collapse of private operator Harris Bus, East Thames Buses was created as an arm's-length, publicly owned operator to maintain service continuity on routes in south-east London. It was subsequently transferred to Transport for London upon TfL's creation in 2000. In October 2009, during Boris Johnson's tenure as Mayor of London, TfL sold East Thames Buses, including its routes, vehicles, and Mandela Way depot, to London General (part of the Go-Ahead Group) for approximately £5 million.
What would happen with the new bus orders?
This means TfL will have to procure them through the open tender market, similar to how they managed the New Routemaster project in 2009 when they tendered out the construction of the three-door, two-staircase hybrid buses with an open platform (won by Wrightbus in late 2009). However, this time it will involve conventional electric buses conforming to TfL's New Bus Specification.
The Cost and Operational Scale of Full Public Ownership
Because London’s bus network operates under a gross-cost franchise model, in which TfL sets fares, routes, and branding while paying fixed management fees to contractors, bringing operations in-house avoids the necessity of purchasing passenger goodwill or commercial route rights. However, taking direct operational control across the entire network represents a substantial capital requirement. TfL would need to acquire physical assets across 89 active garages and transfer approximately 22,000 drivers and engineers under Transfer of Undertakings (Protection of Employment) regulations, alongside establishing operational reserves.
A complete network buyout involves a total capital outlay estimated between £2.05bn and £4.50bn, depending on timing and contract execution. Fleet acquisition represents the largest expenditure, requiring £1.20bn to £1.80bn to purchase or assign leases for roughly 8,500 to 9,000 buses across the network's 7,445 Peak Vehicle Requirement (PVR). This outlay is partially mitigated because TfL already owns the New Routemaster fleet as well as a small number of bus depots, which are currently leased to private operating companies for their route contracts. Transferring remaining depot real estate and garage maintenance facilities requires £600m to £1.00bn, while upgrading IT systems, fleet management software, and depot charging infrastructure accounts for £150m to £300m. Staff onboarding, pension harmonisation, and working capital reserves require an additional £100m to £200m. Under a phased transition where operations are absorbed as existing seven-year contracts reach natural expiry, contract termination compensation is £0, maintaining the total outlay between £2.05bn and £3.30bn. Alternatively, an immediate network-wide buyout prior to contract expiry would incur up to £1.20bn in operator lost-profit indemnities, bringing total costs to £4.50bn.
Financial pressures surrounding network operations are further detailed in Freedom of Information request FOI-1981-2627 published on the TfL website. According to TfL's annual reports, gross bus operating costs expanded from approximately £2.0bn per annum in 2014/15 to approximately £3.0bn in 2024/25. TfL noted that although the bus network undergoes continuous review to reflect changing customer demand, population growth, and travel patterns, overall network level adjustments represent an increase in operating costs rather than a financial saving.
The scale of this task is further highlighted by the concentrated structure of London’s current operator market. The capital's 7,445 PVR is dominated by a small group of major transport conglomerates operating out of 89 recorded garage sites:
- Go-Ahead London holds the largest market footprint, running 20 garages and controlling 26.64% of the network with 1,983 PVR.
- Metroline represents 17.21% of the network across 16 garages with 1,282 PVR.
- Stagecoach London commands 17.05% across 13 garages with 1,269 PVR.
- Arriva London controls 15.92% across 16 garages with 1,186 PVR.
- First Bus London (formerly RATP Dev) accounts for 11.64% across 14 garages with 865 PVR.
- Transport UK (formerly Abellio) holds 11.06% across 6 garages with 824 PVR.
- Independent Operators such as Uno and Falcon cover the remaining 0.49% across 4 garages with 36 PVR.
Because four major operator groups control over 76% of the capital's bus fleet and garage infrastructure, municipalisation beyond the initial 'Buses for London' deployment on Route 6 involves a multi-year asset absorption process aligned with contract expiration dates. Managing public feedback and service alterations throughout this process relies on established consultation frameworks. As stated in FOI-1981-2627, TfL clarifies that a consultation is not a referendum on whether to proceed with changes, but rather an opportunity to consider unrecorded feedback. TfL noted that around 30% of proposals have been amended in some regard since 2020, alongside statutory considerations such as value for money, equality impacts, and overall service affordability.
Regional Precedent: The West Midlands Public Ownership Agreement
The transition structure of the West Midlands Combined Authority (WMCA) offers an operational reference point for public asset acquisition. The move represents a structural reversal of regional transport policy established under the Transport Act 1968, which originally created the West Midlands Passenger Transport Executive (WMPTE) to run municipal bus operations. Following the Transport Act 1985, regional bus services were deregulated in October 1986, leading to the division of WMPTE and the transfer of its operating assets to West Midlands Travel Limited. West Midlands Travel was privatised via an employee buyout in 1991, before being acquired in 1995 by the privatised National Express Group, which later rebranded to Mobico Group. The decision by WMCA effectively brings the regional bus operations back under public control four decades after deregulation.
In August 2026, the WMCA Board approved an agreement to purchase the net assets and operations of National Express UK Bus from Mobico Group. As detailed in Mobico Group's announcement, the transaction reflects a headline asset valuation of £102 million covering regional bus depots, cash reserves, and the vehicle fleet. Deducting £78 million in transferred liabilities, including pension deficit obligations, electric vehicle contracts, and fuel hedging commitments, resulted in a net upfront cash requirement of £24 million. An additional £5.5 million in deferred consideration is structured across late 2027 and late 2029.
As outlined in the WMCA Board approval release, the acquisition was initiated following Mobico's decision to exit the regional bus market. The deal transfers approximately 4,800 operational jobs, up to 750 buses, and services accommodating 4.6 million weekly passenger journeys. According to the UK Government statement, central government provided £11.5 million in transitional funding to assist with legal services, staffing, and IT infrastructure during the transfer to public management.
The West Midlands transaction indicates that transferring existing private liabilities can offset a significant portion of an operator's headline asset valuation, reducing upfront cash requirements. It also demonstrates the use of a transitional public operating entity during the shift toward direct public control. For TfL, a similar asset purchase framework provides an option for acquiring depot real estate and vehicle fleets as existing contracts expire.
Strategic Considerations for TfL
Direct public management removes the private operator profit margin built into contract payments, which typically ranges between 3% and 6%, yielding potential gross savings of £40m to £70m annually against TfL's £1.2bn annual contract spend. Furthermore, aligning municipal acquisition with natural seven-year contract expirations allows TfL to avoid early contract termination liabilities of up to £1.2bn, facilitating a seamless absorption of depot infrastructure and rolling stock over time.
Bringing London's bus operations back into direct public ownership represents a significant political decision. The long-term direction of this initiative remains linked to the outcome of the 2028 London Mayoral election, as policy priorities and public transport funding strategies could shift depending on which candidate takes office. Under a standard phased transition, full municipalisation would be a lengthy process extending over several years to align with contract expiration schedules. However, this timeline could accelerate if a private operator chooses to sell its operations directly to TfL, similar to the agreement where Mobico Group is transferring its West Midlands bus operations to the WMCA.
Operational Challenges and Competing Priorities
Ultimately, attempting to bring London’s extensive bus network back under direct public ownership presents a formidable operational and financial challenge for TfL. While municipalisation offers potential long-term efficiencies and enhanced strategic control, any network-wide buyout or asset expansion must compete against an already intensive list of capital investment priorities across the city's transport infrastructure.
TfL is currently managing several multi-billion-pound commitments vital to maintaining and upgrading the capital's network. These include funding new rolling stock for the Piccadilly and Bakerloo lines, delivering new trains for the Docklands Light Railway (DLR), progressing major expansion projects such as the West London Orbital and the Bakerloo line extension, and continuing essential step-free accessibility improvements across Tube and London Overground stations. Balancing these massive infrastructure demands alongside the capital outlay and operational risks of bus municipalisation prompts a huge challenge for TfL, requiring careful long-term financial planning and political backing.
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