D&G Bus

D&G Bus is the trading identity of Rolling Solutions Ltd and a sister company of Green Triangle Buses Ltd trading as South Lancs Travel. Both operations are owned by David Reeves and Julian Peddle though they have very different identities. They have their head office facilities at The Wellington, a former public house on the High Street in Uttoxeter, Staffordshire, where I met David recently to hear about developments at D&G in particular.

A Grade 2 listed property, the building was bought as a fire damaged shell in June 2013 and restored. The location suits David who lives nearby. It houses the payroll and accounts functions for both businesses as well as the bus route and timetable planning and is home not only to David but also Chris Almond, Bus Network Manager, Heidi Holland, General Manager, Emily Huthwaite, David’s PA and Kelly Thomas who looks after the accounts. The operational management of the bus companies, including holding the traffic and engineering meetings, is at a local level, with Group Operations Manager, Kevin Crawford, floating between depots.

Describing the motivation behind the businesses, David said, ‘We respond as market opportunities arise. The aim is to run profitable businesses that are well managed, offer a reliable service and have good engineering standards. We aim to make sure the businesses operate within those regimes, but also react to opportunities as they arise within the industry. We don’t particularly want to run 150-200 buses, but by the same token, if the opportunity came knocking we would react accordingly. On a personal level it is no secret that I’ve wanted to do a bit less.’

Julian Peddle continues to play a very active part, especially with regard to routes; planning where and when the buses should run. ‘He is a source of great knowledge. His ability to string together timetables and to deliver services that operate at the right time, in the right place and hopefully charging the customer the right fare is a core part of our business. It’s something that he’s very, very good at.’

Background

D&G was a relatively late entrant to the market, running its first four buses in 1998 on two tendered contracts for Stoke on Trent City Council. By the end of the first year they had 16 buses in operation, although it wasn’t for three years that David came full time into it, to work alongside his late friend and business partner, Gerald Henderson, the G of D&G. Sadly Gerald died in 2006, by which time D&G had developed into a significant operation with a new depot and a second operation in Crewe.

I’ve covered the early years of the company in articles before, so I won’t repeat that here.

On 30 September 2011 the Stoke business was sold to Arriva because, David explained, ‘I’m a businessman. The opportunity came up to sell it. I still own the property and they guaranteed to rent it for ten years. At the time it seemed the right thing to do. Stoke was in the process of dropping tenders so we sold D&G and decanted to Crewe, which was doing well.’

‘Then the opportunity to buy Green Triangle Buses, trading as South Lancs Travel came up because Martin Bott and David Stewart wanted to do other things. We thought we could add a little to it and we bought it. With cautious optimism I can say that the business is doing very well. We’ve just bought four new Enviro200s.’ South Lancs Travel has a very different look to the D&G fleet, not least in the livery it uses which is an attractive combination of blue, yellow and white. The fleet can be seen across the area of its title, principally serving Leigh, Wigan, Bolton and St Helens.

Crewe

Having sold the Potteries business, Crewe became D&G’s focus. It currently has an allocation of 38 vehicles plus the D&G Little Bus fleet of 11 minibuses. Most routes are commercial, developed by filling gaps in the network, but some are supported by Cheshire East Council or Staffordshire County Council.

The majority of Crewe buses carry the standard two-tone red livery but four 2013 Solo SRs are branded in silver and pink for One1ink, a few are in Staffordshire County Council’s Plum Line and Cityrider liveries and one carries a Tesco Extra scheme. There is also a Solo out-stationed at Leek in Sainsbury’s colours.

Crewe’s operations ran from a large and quite well appointed yard, the downsides to which were that it was rented and at an indeterminate point in the future it was going to be redeveloped. David did not like the uncertainty of not being in control and set about looking for a new base to buy. Although prepared to look within a 15 mile radius of Crewe he didn’t find locating somewhere easy, though in the end, the site purchased was only half a mile from the old one. Officially opened on 23 October 2014 by the Mayor of Cheshire East, exactly ten years after the start of D&G’s first operations in the town, it is a 1.25 acre site next to the railway off Cowley Way. On it a new three bay workshop has been erected, complete with rolling road, and a secondhand portable workshop building has also been acquired and set up. Four refurbished portable buildings with two stacked on top of each other, form an office complex with toilets, canteen, a meeting room, training room, and two offices. Room for growth has been built in to them although there is not a great deal of spare parking capacity remaining and the nature of the Crewe market is such that opportunities for further growth locally may be somewhat limited.

One expansion of the Crewe operation that occurred was the taking on of the Little Bus demand responsive minibus operation under a five year contract for Cheshire East. Initially operated with a PVR of eight minibuses, that has since grown, of necessity, to nine to fill a gap in the service network. It both provides a dial-a-ride type facility and enables the local authority to offer a service to areas where there are no other bus services. Passengers have to be registered in order to use the buses and they need to plan ahead and book the day before at the latest. Bookings cannot be taken on the day.

David sees operating demand responsive services as an opportunity. ‘We’ve been trying to get into something other than bus services for some years,’ he said. He does not think that there will be any conventional rural bus services operating in a few years time with this type of operation filling the gap it will leave. He explained, ‘We are running it as a PCV operation with PCV drivers, although it didn’t need to be. For me, it raises the bar.’

It employs rather a mixed fleet including VW Crafters, Ford Transits, a couple of Iveco Dailys and a Mercedes-Benz Sprinter, because the vehicles are those formerly operated by Cheshire East.

Back to the Potteries

David admits that he had been trying to win the tendered contract for the 841 service from Uttoxeter to Stafford for around 15 years, continuing to try for it after the sale of the Stoke operation despite the distance from the Crewe depot, which was factored in to the bid. It came as something as a surprise when the route, with a PVR of three, was won last year and rather than run it from Crewe, it was decided to establish a small depot in Uttoxeter.

Soon afterwards First reduced the frequency on a trunk route linking Newcastle-Under-Lyne with Meir via Stoke, Fenton and Longton from every ten to every 20 minutes, prompting David to register a new four bus operation that operated between First’s remaining runs to reinstate the original frequency. It started running on 30 October. The new route was branded ‘The Orange ONE’ and given a distinctive bright orange livery which is relatively unusual for commercial routes run by D&G, most of which feature the all over red livery. Three late Enviro200s were purchased in an online auction and a used Solo was also acquired.

So far, D&G are ‘reasonably pleased’ with the performance of the ONE. ‘It’s not stunning but it’s there or thereabouts. It’s built up a steady degree of patronage,’ said David.

The Orange ONE started and finished in Longton and this was a significant factor in a decision to move from the Uttoxeter depot and establish a depot on the Cinderhill Industrial Estate in nearby Meir for the allocation of both the ONE and the 841. The move took place a couple of weeks ago and work on adapting the facility has yet to be completed, but it will house nine buses and an engineering facility. A small yard provides space for more buses and driver’s cars. David, who likes owning property, though the Cinderhill site is rented, admitted he had previously tried unsuccessfully to buy the former Procters depot site in Fenton when they closed down.

No sooner had the new depot been identified than the chance to buy the bus operations of BakerBus came up. D&G was not offered the former Bakers coach and travel operations but would not have been interested anyway because the company preference is not to get involved in coach operation. Negotiations were complicated but a deal was eventually completed and Baker’s routes taken over with effect from 11 January. Included in the deal were nine buses. These included seven Wright Streetlites, a Solo and a DAF SB120 Wright Cadet. ‘It’s the first time we’ve operated Streetlites so we’ll see how they go,’ said David.

David praised how the BakerBus management looked after the staff who were transferring. ‘They went out of their way to do so,’ he said. With less than a week of operation under their belts when I visited it was too soon to say how the services were doing, but he was pleased with the drivers who had come across.

He made no bones about the motivation for the purchase. ‘What we wanted was a couple of commercial routes.’ Purchasing routes, replacing dropped departures or starting services from scratch suits the way D&G likes to work. ‘We don’t want to be taking anybody on, we don’t want to be fighting anyone, we want to be doing our own little bit, thank you very much.’

Bakers’ former services are quite a mixed bag. Registered to Rolling Solutions (trading as D&G) from 11 January were the X15, Plumbline, 101, 99, 94, 10A, 9, 74A, 27, 17A and 423. The main attractions are the 9 service between Biddulph, Bradeley and Hanley and the 94 linking Congleton and Newcastle via Biddulph, Tunstall and Wolstanton, both of which have a three bus PVR. Also included are the tendered 423/424 in Biddulph, the SB123 Sandbach town service and the 5 and 6 in Macclesfield.

With the additional buses, the new Meir site is already pretty much up to capacity.

Business disposals

Although the current operation is going very well, there are always opportunities and risks with entrepreneurial ventures and David has been involved with other bus operations, either though D&G or personally, that are no longer owned. The disposal of the original Potteries operation is an example of this.

Another is the Midland business, based at Darlaston in the West Midlands. Bought in 2006, it was sold in September 2012, also to Arriva, for several reasons. ‘Operationally it had been loss making but it had turned to profit. The accounts for the last couple of years were very healthy. Operationally we were there or thereabouts. Arriva saw it as an opportunity for growth because they wanted to get more in to the West Midlands market. We saw that if they were determined to increase their presence through the tender market then the value of tenders may have gone down. The price offered was reasonable, so we decided to withdraw gracefully and move on to other things,’ said David.

He has ‘no regrets’ about selling Midland. ‘I’ve very few regrets about anything. I do it and move on. I enjoyed the West Midlands, I enjoyed working with Centro. I look back at it with fond memories.’

In some ways less successful was Strawberry. When Oliver Howarth left Blackpool Buses in 2009 David supported him in the process of the formation of Strawberry, a St Helens based bus operation, mainly through providing business advice. He subsequently supported it financially and ultimately it was combined with the South Lancs operation, with operations transferred to run out of the Atherton depot.

Vehicles

Prior to the latest acquisitions through BakerBus, the overwhelming majority of the main D&G fleet was made up of Optare Solos and Versas and ADL Dart SLFs and Enviro200s, though there are exceptions including a Scania OmniCity trio and some VDL SB120s with Wright and MCV bodies. There is also a Volvo B7TL East Lancs Vyking that was formerly with South Lancs.

The buying policy is a very straightforward one: ‘We buy whatever we feel is the best deal at the time,’ said David. He added, ‘Following the Baker deal we could usefully employ another couple of vehicles, so it’s a question of what is out there now. I’m considering late Solos and Versas because they are what is available.’

The last brand new acquisitions were a quartet of ADL Enviro200s. ‘We had decided to buy four brand new buses by April 2015 and for various reasons we decided to bring that forward acquiring the four Enviro200s at the end of December. They have all gone to South Lancs.’ Explaining the allocation David said, ‘South Lancs has been a work in progress. It had been marginal but for the year ending 31 August 2014 it made a small profit and, as directors, we had made a commitment to ourselves to put in new buses when we did get to profit to reward the staff for all of their hard work. It is very encouraging the number of staff who have been there a long time, worked hard, stuck through it and done something to be proud of because these are not easy times.’

Bakers had been operating double deck Wright bodied Volvo B5LH hybrids on one of the routes but the operating leases on them were not taken over, as David explained. ‘We didn’t take the hybrids because the deal wasn’t right. The maths didn’t stack up. I’m not an engineer. If the deal had worked with the hybrids in we’d have been only too happy to take them, but unfortunately it didn’t. We like to own our assets – we’ve got nothing on operating lease or rental. We like to improve the balance sheet. Everything we have we either own outright or it’s on hire purchase.’

Excluding Bakers, which will have had a marginally positive effect, the average age of the fleet is eight years for D&G Bus and 9.4 years for South Lancs Travel.

DDA

For an independent operator running quite a number of secondhand buses in addition to vehicles acquired new, the potential for problems in meeting the DDA deadlines on accessibility is real, but D&G are not anticipating much of an impact from complying. ‘We’ve got a list of what we need to do and are on target to meet that plan and deliver the targets by 31 December 2015,’ said David. ‘As of last November we had 17 buses affected, some of which we can upgrade, leaving about ten buses to replace. With the latest acquisitions we are already nearly there. It’s something we are managing our way through, just as we did with the driver’s CPC.’

Industry issues

David anticipates that the size of the tendered bus market will get smaller in the coming years because the continuing pressure on council budgets will reduce the number of tenders.

He doesn’t see much likelihood of additional revenue from the Concessionary Fare scheme either. ‘We’ve seen a continual reduction, year on year, since it came out such that we are now getting less than 50% for concessionary travel. On a £1.00 fare it is give or take 50p. In 1998 when we started there was a half fare travel scheme and we got 70-80p. It’s ridiculous. The whole process of concessions is flawed. We’ve spent far too much time as an industry arguing, discussing and debating with Councils, Unitary Authorities, the DfT and the like on how much concession we get for each OAP. The DfT keep rewriting the rules that everyone has to follow. It’s basically that the Government decides that the budget will be this and then writes the rules to fit it. I think they should just pay so much per concession and every operator gets exactly the same per OAP. You could always add something on a mileage basis, but you’re back to complexity and you’re going to spend all of your time arguing about spreadsheets. The trouble is that we spend all this time arguing about spurious spreadsheets, and on page seven of a 94 page spreadsheet they’ve got an assumption. As soon as you’ve got an assumption within the document it ruins the whole carefully calculated argument. We’re currently debating with one authority whether we get marginal capacity costs or not. Whatever system you have there will always be debate, but the current one is wrong and the system needs simplifying. Why don’t we just have so much per head. Reimbursement will keep going down. One wonders how low?’

Looking forward, though he doesn’t welcome the move, David is resigned to the loss of BSOG. ‘I think it will disappear and it’s only a matter of time,’ he said. ‘That means less money will come into the industry so we will have to raise fares, reduce services or operate at a lower marginal profit, assuming a profit is being made. It’s not sexy too so it’s an easy one to get rid of.’

David is more philosophical about the likelihood of Quality Contracts than many operators. ‘You can argue the pros and cons,’ he said, ‘honestly, I’ve not got a strong view either way, though as a conservative that favours a free market I believe Quality Contracts stifle competition. I personally believe competition has raised standards and increased bus patronage. I think it is bizarre that a Conservative Government is expounding the virtues of Quality Contracts that do not have the core values of those that they represent. I have been a councillor, though I’m not a particularly political person, and I have written to my MP about it.’

Rapidly dropping fuel prices are a positive but only to an extent because the operation hedges on fuel prices. ‘Twelve months ago I thought what a clever chap I was,’ said David. ‘It has since reduced staggeringly. We hedge about 50% of our usage. Twelve months ago it had worked for us. Hedging only works if fuel prices go up.’

Last word

D&G Buses and South Lancs are a great advertisement for a deregulated environment. They provide tendered services more economically than a local authority could and to a high standard and have developed their commercial network without undermining other operators’ services. Passengers are the winners.

David summed up, ‘Our core ethos is reliability. It’s about operating on time with friendly drivers who look after the passengers.’