Greater Manchester Buses South Ltd v Greater Manchester Combined Authority
| Jurisdiction | England & Wales |
| Judge | Mr Justice Julian Knowles |
| Judgment Date | 09 March 2022 |
| Neutral Citation | [2022] EWHC 506 (Admin) |
| Docket Number | Case Nos: CO/744/2021 and CO/291/2021 |
| Year | 2022 |
| Court | Queen's Bench Division (Administrative Court) |
and
and
[2022] EWHC 506 (Admin)
Mr Justice Julian Knowles
Case Nos: CO/744/2021 and CO/291/2021
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
MANCHESTER DISTRICT REGISTRY
As at Manchester Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ
Marie Demetriou QC and Malcolm Birdling (instructed by Herbert Smith Freehills LLP) for Greater Manchester Buses South Limited
Andrew Singer QC and Mark Laprell (instructed by Backhouse Jones Solicitors) for Rotala plc
John Howell QC and Amy Rogers (instructed by GMCA Solicitor) for the Defendants
Greater Manchester Bus Operators Association Limited (t/a OneBus) did not appear and was not represented
Hearing dates: 26 – 28 May 2021
Judgment Approved by the court for handing down (subject to editorial corrections)
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Introduction
These two applications for permission to seek judicial review challenge the decision of the Mayor of Greater Manchester to reform bus services in the region. They are brought by two bus operating companies: Greater Manchester Buses South Limited (Stagecoach Manchester/Stagecoach) and Rotala plc (Rotala). Specifically, the companies challenge the Mayor's decision on 25 March 2021 to make the Greater Manchester Franchising Scheme for Buses 2021 (the Franchising Scheme). I will refer to this as ‘the Decision’. If implemented, the Franchising Scheme will radically alter how bus services in Greater Manchester are delivered.
I held a remote ‘rolled-up’ permission hearing by Microsoft Teams between 26 and 28 May 2021. The material before the Court runs to thousands of pages, a lot of it being dense and technical material, such as economic modelling and forecasting. As I will explain, the decision-making process began in 2017 and was seriously impacted by the COVID pandemic in 2020/21. It is the potential effects of the pandemic on the transport market in Greater Manchester which lies at the heart of the Claimants' cases.
I grant permission to both Claimants. Their claims raise arguable grounds, and the subject matter is of considerable importance to the region and its people.
The parties
Stagecoach Manchester is a major commercial bus operator whose business is largely focused on South Manchester. It is the largest bus operator in Greater Manchester, with almost 100 million passenger journeys in 2019/20. Stagecoach Manchester is a wholly owned subsidiary of Stagecoach Bus Holdings Limited and is ultimately owned by Stagecoach Group plc.
Rotala also operates bus and coach services in the North-West, and is the second largest bus operator in the Greater Manchester area.
The Interested Party, OneBus, is a partnership of commercial bus operators in Greater Manchester which was formed in 2018 to enable bus companies to speak with one voice and drive a shared commitment to improve public transport across the Greater Manchester region. Whilst it was served as an Interested Party, it did not take part in the hearing.
The First Defendant, the Greater Manchester Combined Authority (the GMCA), is the mayoral combined authority in Greater Manchester. It is made up of the Mayor, who is the Second Defendant to these claims, and an elected member from each of the ten constituent Metropolitan Borough Councils in Greater Manchester (Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, and Wigan).
The GMCA was created by the Greater Manchester Combined Authority Order 2011 (SI 2011/908) (the GMCA Order), which was made under the Local Transport Act 2008 and the Local Democracy, Economic Development and Construction Act 2009. The GMCA has the functions set out in the GMCA Order (and other legislation), including in relation to transport, economic redevelopment, and regeneration.
Transport for Greater Manchester (TfGM) is an executive body of the GMCA responsible for running Greater Manchester's transport services. TfGM has its own functions as the transport executive for the GMCA's area under Part II of the Transport Act 1968 (TA 1968). It also acts as the GMCA's executive body for the purposes of Part 5 of the Local Transport Act 2008 and Part 6 of the Local Democracy, Economic Development and Construction Act 2009. It has powers to assist the GMCA in the discharge of that authority's functions: see s 9 of the TA 1968 and Article 9 of the GMCA Order.
In summary, as Mr Howell QC explained, TfGM effectively acted as an officer of the GMCA in conducting work relating to the Proposed Franchising Scheme. Its work was then presented to the GMCA, which voted on whatever recommendations had been made in relation to the work in question.
Glossary
This judgment uses the following terms and abbreviations:
Provision of bus services and franchising: the statutory scheme
| The Assessment | The GMCA Report, ‘Bus Franchising in Greater Manchester Assessment September 2019’, ie, the statutory assessment under s 123B of the TA 2000 prepared by TfGM on behalf of the GMCA |
| Assurance Review | The non-statutory review of the COVID Impact Report carried out by Grant Thornton and presented to the GMCA in November 2019 |
| BCR | Benefit Cost Ratio (in simple terms, a BCR is the ratio of the benefits of a project or proposal, expressed in monetary terms, relative to its costs, also expressed in monetary terms) |
| BSA 2017 | |
| COVID / COVID-19 | The disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), named as COVID-19 by the World Health Organisation in February 2020 |
| COVID Impact Report | The TfGM report to the GMCA, ‘ COVID-19 Impact on Bus Franchising Report’ (19 November 2020) |
| The Decision | The Mayor's Decision of 25 March 2021 to make the Scheme, attached to his Decision Notice as Appendix 1 |
| DfT | Department for Transport |
| DGR | The Defendants' Detailed Grounds of Resistance |
| First Consultation Report | The TfGM report to the GMCA, ‘Bus Franchising in Greater Manchester June 2020 Consultation Report’ (26 June 2020) |
| Franchising Guidance | The Bus Services Act 2017 Franchising Scheme Guidance, issued by the Secretary of State for Transport under s 123B(5) and other provisions of the TA 2000 |
| Franchising Scheme | The Greater Manchester Franchising Scheme for Buses 2021, made by the Mayor of Greater Manchester on 25 March 2021 |
| GMCA | Greater Manchester Combined Authority |
| GMCA Order | Greater Manchester Combined Authority Order 2011 (SI 2011/908) |
| GMCA Functions Order 2019 | Greater Manchester Combined Authority (Functions and Amendment) Order 2019 (SI 2019/793) |
| Grant Thornton | Grant Thornton UK LLP. Retained by the GMCA to carry out work relating to the franchising decision-making process. |
| The March 2021 Report | The report presented to the GMCA by its Chief Executive on 23 March 2021 in accordance with s 123G of the TA 2000, ‘Bus Reform: Consultation and the GMCA Response’ |
| National Bus Strategy | The DfT paper ‘Bus Back Better – National Bus Strategy for England’ (March 2021) |
| NPV | Net Present Value (in simple terms, the NPV is a figure which provides a method for evaluating and comparing capital projects by reference to cash flows spread over time. The higher the NPV, the more profitable the project and the more attractive it is) |
| PSV | Public service vehicle |
| The Scheme | The Bus Franchising Scheme contained in Appendix 1 to the Decision Notice signed by the Mayor of Greater Manchester on 25 March 2021, ‘Bus Reform — Bus Franchising Scheme — Consideration of GMCA Response to Consultation’ |
| Second Consultation | |
| Report | The TfGM report to the GMCA, ‘Bus Franchising in Greater Manchester Second Consultation Report’ (12 March 2021) |
| TA 1968 | |
| TA 2000 | |
| TfGM | Transport for Greater Manchester |
Since 1986, bus services outside of Greater London, including in Greater Manchester, have been deregulated. This means that bus services are provided by commercial operators who, in competition with one another, decide their own routes, timetables, fares, ticket types and customer service provision and, accordingly, retain control over their revenue and profits.
Certain local types of local authority, known as franchising authorities, were given powers to make bus franchising schemes under Part II of the TA 2000 as amended by the BSA 2017. In simple terms, under a franchising scheme, bus operators provide services under contract to the local transport authority (a term defined in s 108(4)). As a mayoral combined authority, the GMCA is a franchising authority under the TA 2000: s 123A(4)(a).
Under the TA 2000, some decisions relating to franchising are for the GMCA to take. But others, including the decision whether or not to make a franchising scheme, are ones for the Mayor personally to take on behalf of the combined authority: s123G(1)(b) and s123G(4), TA 2000; Article 4 of, and Sch 1, [3(i)], to the GMCA Functions Order 2019.
A franchising scheme is defined in s 123A(3) of the TA 2000 as one:
a. under which the franchising authority (or authorities) identifies the local services (as defined in s 2 of the TA 1985, by virtue of s 162(3), TA 2000) that it considers...
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