The decision, taken by the West Midlands Combined Authority (WMCA) board, follows a detailed study which concluded franchising the region’s bus services offered the best value for money. 

The WMCA is currently paying approximately £50 million a year in additional subsidies to private operators to run services but has been unable to stop fares rising and services being reduced.

This is in addition to over £100m a year the Government and WMCA are paying to support some contracted bus services, the £2 single fare, and other contributions and concessions in the West Midlands.  

Under the franchising model bus operators would be contracted to run services, with routes, timetables, fares and other standards, such as a commitment to zero-emission vehicles, set by Transport for West Midlands (TfWM), which is part of the WMCA. 

The next steps will see an independent audit of the franchise assessment, followed by public consultation later this year – with a final decision taken as soon as the end of March 2025, following a rigorous process set by Government legislation.  

West Midlands mayor Richard Parker, said: “The West Midlands is paying an additional £50 million subsidy every year to private operators and yet they increase prices and cut services year-on-year. Though the public purse is funding the incomes of private bus operators, we have no real say in how they run our buses. This has to change.

“With 232 million journeys across our region last year, it is clear that buses are the backbone of our public transport network. Without them, our residents cannot access essential services like schools, pharmacies, doctors’ surgeries or employment opportunities. I want the West Midlands to have a bus network that is affordable, accessible and works for all of our residents.

“One of my big campaign pledges was to deliver a better bus network, one that is designed for those who use it and rely on it. Today we are taking a major step toward delivering just that. Our internal assessment has shown that franchising is the best option for the region, and now we will be clarifying these findings, with a view to rolling out the first publicly controlled buses on our streets in 2027.

“The West Midlands will be the best region to live, learn and do business. It deserves a transport network that supports every resident and every business to succeed. Greater public ownership means we can work together with you – our residents - alongside local authorities and transport providers to ensure our network works for everyone, to ensure the West Midlands can thrive.”

Following the final approval next year it is estimated there will be a two-year transition during which the new bus network will be designed and contracts tendered. The transition itself is estimated to cost around £22 million.

The assessment also recommends that TfWM take greater ownership in bus depots to ensure greater competition between operators bidding for contracts and allow easy access to electric charging infrastructure as it becomes more common place. Under the current system the taxpayer can invest millions in electric infrastructure in depots and the operator is under no obligation to pass that back to the transport authority if it ceases to continue.  

The current subsidy agreements with bus operators are due to finish at the end of December 2024, with a risk for further service reductions. TfWM is working with bus operators, undertaking a review of services and looking to secure further funding to maintain the network during the transition period. 

This will inevitably involve some changes to bus routes and services from January and more detailed information will be issued later this year.