With Transport for London (TfL) having recently unveiled Buses for London, its new publicly owned bus company, and continuing to work towards a fully zero-emission bus fleet, it got me thinking: what if TfL went a step further and started manufacturing the buses themselves?
(Disclaimer: This is just an opinion piece to spark a discussion, not a formal suggestion! I also had a bit of assistance from AI when putting this article together.)
This article was prompted by an opinion poll I recently posted on X (formerly known as Twitter). If Bluesky had a poll feature, I would have posted one there as well.
📊 Opinion poll Should there be a bus manufacturing plant for London? 🚍
— CLondoner92 (@CLondoner92) November 8, 2026
Historical Precedents: Public Ownership and Vehicle Production
The idea of municipal or direct involvement in vehicle production is actually not entirely unprecedented in London's transport history.
In the early twentieth century, the London General Omnibus Company (LGOC) manufactured its own motor buses, such as the famous X-type and B-type models, at its Walthamstow works before those manufacturing operations were spun off into the Associated Equipment Company (AEC) in 1912. For decades, London Transport maintained a close partnership with AEC, notably co-developing iconic vehicles like the AEC Regent III (which formed the chassis for the ubiquitous RT-type, the quintessential post-war red London bus, as well as the RLH type) and the Routemaster. However, this historic industrial link finally ended during the early 1970s amid industry-wide rationalisation and the consolidation of bus manufacturing under British Leyland. Shortly thereafter, the London Transport (Additional Powers) Act 1975 was passed, providing the London Transport Executive with key statutory powers regarding its operational facilities and business powers.
Later, ahead of the 1981 Greater London Council (GLC) election, the Labour Party published a policy document titled A Socialist Policy for the GLC, which proposed establishing a municipal bus manufacturing plant. Prompted by the closure of British Leyland's Park Royal works, the GLC planned to use powers under the amended 1969 Transport Act to build a new bespoke London vehicle as the successor to the Routemaster, known as the XRM. Managed by a board answerable to an industry committee and intended to involve a public-sector manufacturing consortium, the proposal aimed to restore London's capacity to build its own buses locally.
Modern Lessons: The Arrival Microfactory Model
The concept of decentralised vehicle assembly was notably championed by British electric vehicle start-up Arrival. Founded in 2015, the company sought to challenge traditional automotive manufacturing through the use of low-cost microfactories: smaller-scale production facilities that could be established close to local markets, potentially by adapting existing industrial buildings or warehouses. The aim was to manufacture commercial electric vehicles, including vans and single-deck electric buses, using a more flexible and decentralised production model.
While the microfactory model offered a compelling vision for localised production and lower capital overheads, Arrival ultimately struggled to scale its operations, faced significant financial difficulties and failed to secure sufficient commercial orders. Its UK operations subsequently entered administration in 2024.
What Does TfL Actually Say?
Looking at a previous Freedom of Information request (FOI-1157-2425), TfL was asked directly if they plan to set up their own bus manufacturing company alongside the publicly owned bus operator. Their answer was clear: they hold no information regarding any future plans to do this.
Furthermore, while TfL makes some bus-related technical documents and vehicle specifications publicly available, not all detailed design information is accessible. For example, FOI-3577-2526, published on 9 January 2026, was submitted by an individual considering establishing a start-up electric bus manufacturing company and seeking detailed New Routemaster design specifications to support the development of a new double-deck electric bus for London. TfL confirmed that it held the requested information but refused to disclose it under Section 43(2) of the Freedom of Information Act 2000, citing concerns that disclosure could prejudice its commercial interests and future negotiations when tendering for new bus designs. This highlights TfL's involvement in setting vehicle requirements, while the actual manufacture of its buses remains with external manufacturers. Establishing a TfL-owned manufacturing operation would therefore represent a significant change to its current approach.
There is also an interesting statutory provision worth noting. Schedule 11, paragraph 8 of the Greater London Authority Act 1999 gives TfL powers to manufacture and repair spare parts, components and supplementary machinery or equipment required for the operation or repair of its existing vehicles and equipment. It also allows TfL to repair vehicles and supply necessary parts for vehicles belonging to other organisations. However, these provisions do not explicitly extend to the manufacture of complete buses. This raises an interesting question about whether further statutory powers or legal arrangements would be required for TfL to establish its own full-scale bus manufacturing operation.
The Challenges of a TfL Factory
How could it work in practice? The reality is that it would not be straightforward:
- High costs and subsidy pressures: The experience of the New Routemaster project illustrates the potential financial and political challenges. Originally known as the New Bus for London, the project stemmed from a flagship commitment in Boris Johnson's 2008 mayoral manifesto to introduce a new bus for the capital. Following a competitive tendering process, Wrightbus was selected as the preferred manufacturer on 23 December 2009 to design and build the New Bus for London, working alongside Heatherwick Studio, which led the vehicle's design. The total capital cost of the fleet was reported at more than £350 million. Establishing an entirely new bus manufacturing operation from scratch would present a different set of challenges, potentially involving substantial upfront investment, production risks and initial operational difficulties. With TfL's published forecasts putting the annual bus network operating subsidy at approximately £1.28 billion for 2026/27, rising to £1.7 billion by 2029/30, justifying additional public expenditure on a manufacturing facility could prove difficult. Any financial support would also need to be assessed against the requirements of the UK's subsidy control regime.
- Competition issues and subsidy control: Public investment in a TfL-owned manufacturing operation could raise questions about fair competition with existing bus manufacturers, particularly if the facility received financial support unavailable to private-sector competitors. Any public funding would need to comply with the UK's subsidy control requirements.
- Selling outside London: Instead of relying exclusively on London orders, a factory like this would need to secure additional customers once the initial fleet replacement programme had been completed. As I mentioned over on Bluesky, selling buses to operators outside London and potentially overseas could help maintain production volumes and make the operation more commercially viable. To achieve this, external bus companies across the UK and beyond should be able to purchase new buses directly from the TfL-owned manufacturer, rather than keeping production exclusively for London operators.
Between 2014 and 2017, Alexander Dennis Limited’s annual reports highlighted challenges in the #London bus market due to New #Routemaster orders by #Transport for London. Despite this, it maintained strong UK market share and expanded its Enviro200 and Enviro400, including electric models.
— CLondoner92 (@clondoner92.bsky.social) May 18, 2025 at 11:17 AM
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What About the Private Sector, or a Middle Ground?
Could someone establish their own bus manufacturing company in the private sector specifically for London? I'm not a business expert, so I cannot fully answer that question, because it would take huge private investment, planning permission, and factory space to set up a brand-new manufacturing company in London.
However, there is another option: could TfL own the manufacturing building and equipment, and contract a private manufacturing company for a fixed term to run it and build new buses?
In infrastructure, this is known as a Government-Owned, Contractor-Operated (GOCO) model. Under this setup, TfL would fund the land, factory building, and heavy equipment, perhaps in an industrial area like East London, and then award a fixed-term contract to an experienced bus manufacturer to bring in their engineers and run the production line. The UK Government has used this exact setup for strategic sites like the National Physical Laboratory (owned by the state, operated under contract by private firms) and historically at defence manufacturing sites, where the state wants to protect critical domestic capability while relying on private-sector technical expertise. This approach also has some parallels with TfL's existing rail operations. Both the Elizabeth line and London Overground are managed by TfL, which retains responsibility for setting service requirements and overseeing performance, while contracting private companies to operate the services. The Elizabeth line is operated by GTS Rail Operations, while London Overground operations are contracted to First Rail London. This demonstrates how TfL can retain strategic control while relying on private-sector expertise to deliver day-to-day operations, a model that could potentially be adapted to bus manufacturing.
In some respects, this arrangement could be quite suitable. TfL would retain long-term control of the facility and have the flexibility to change contractors if performance fell below expectations, while leaving the complexities of bus manufacturing to specialist operators. The private contractor could also make use of any spare production capacity to manufacture and sell buses to organisations outside London, generating additional commercial revenue to help offset operating costs. However, it would be important to establish clear contractual responsibilities for issues such as machinery breakdowns and production delays.
Pros and Cons: Should TfL Establish Its Own Bus Manufacturing Plant?
Pros
- Supply Chain Control: Greater control over delivery schedules, custom accessibility features, and faster zero-emission rollouts without relying entirely on outside companies.
- Commercial Revenue and Open Sales: Allowing external bus companies outside London to purchase new buses from the plant would bring in extra revenue, keep order books steady, and help offset the public subsidy required to run the network.
- Local Jobs: Direct investment in green manufacturing jobs, apprenticeships, and local industry.
- Keeping the Assets via GOCO: If TfL owns the factory and equipment through a GOCO model, it would retain long-term control of these assets and have the flexibility to appoint a different contractor if the existing operator underperformed, subject to contractual arrangements.
Cons
- High Upfront Costs and Subsidy Burden: Setting up heavy manufacturing would require substantial public investment at a time when TfL's projected bus network operating subsidy is approximately £1.28 billion for 2026/27, with forecasts indicating that it could rise to £1.7 billion by 2029/30.
- Competition and Subsidy Control: Public investment in a TfL-owned manufacturing operation could raise questions about fair competition with existing bus manufacturers, particularly if the facility received financial support unavailable to private-sector competitors. Any public funding would need to comply with the UK's subsidy control requirements.
- Political Risk: Transport authorities are experts at running networks, not building vehicles. Any factory delays or mechanical faults would quickly become high-profile political headaches for the Mayor and TfL.
Conclusion
Ultimately, while establishing a TfL-owned manufacturing plant or adopting a GOCO model offers intriguing possibilities for supply chain security and local job creation, the practical barriers remain formidable. High capital costs, existing market competition, strict subsidy control rules, and operational risks mean that such a venture would represent a significant departure from TfL's current operating model. Whether viewed as a thought experiment sparked by recent discussions on public transport ownership or a long-term policy proposal, the idea underscores the complex trade-offs between public sector control and commercial market realities in modern transport planning.
On Creativity in Public Transport
On a personal note, I strongly believe in bringing creativity into public transport. Relying on a single standardised, bespoke design across the entire network can feel repetitive, especially for transport enthusiasts. Having a variety of vehicle styles on the road is not just visually appealing; it also offers a practical benefit by letting passengers spot their route from afar simply by recognising the silhouette of the bus. That is why I would much rather see multiple manufacturers competing to produce sleek, high-specification buses for London and beyond, ultimately making bus travel a far more exciting and attractive option for everyone.
I would like to extend an invite for you to follow me on X (formerly Twitter) for transport-related updates. You can find me by searching for @CLondoner92 or by clicking on the direct link to my X page here. I am also present on BlueSky and Mastodon. I look forward to connecting with you on these platforms. Thank you for your support.
Further reading
Does London need a new ‘bespoke bus’ to replace the hybrid New Routemaster?
