Edinburgh may merge trams and buses into one firm

The City of Edinburgh Council will discuss proposals on Thursday, July 9, that include an option to create a single company for Lothian Buses and Edinburgh Trams.

The council said its policy and sustainability committee will consider a report with three options on Thursday for the future operation of Lothian Buses, Edinburgh Trams and Transport for Edinburgh.

These options include a “do nothing” scenario, a “do minimum” option and a “preferred” third option for the creation of a single company to deliver all functions.

Transport for Edinburgh Limited was formed by the council in 2014 as parent company, with a wholly owned subsidiary Edinburgh Trams Limited and a 91% ownership of Lothian Buses Limited, with East Lothian, West Lothian and Midlothian as minority shareholders.

“The third option, to create a single company, is being put forward as the preferred option, allowing the ongoing delivery of high-quality public transport with no negative impact on the travelling public or frontline staff,” said the council.

“It is proposed that existing bus and tram services, as well as the city’s cycle hire scheme, would be maintained as separately branded divisions, while integrated back office functions would be delivered, along with potential senior management savings.

“A single company would require a new shareholder agreement between the owners and the company, with the new structure to be developed in consultation with the minority shareholders.

“The needs of partner councils, both from a transport policy and financial perspective, must be fully addressed.

“Before a final preferred option is confirmed, a further report will be brought back to committee for decision.

“This will follow discussions with the public transport companies, minority shareholders and trade unions to gather views on proposals and will set out any changes required on the shareholder side.”

The council said: “The report acknowledges that the current structure of ownership — shareholding, parent company and group of companies, all responsible for delivery of different aspects of the transport network — has led to inefficiencies and a lack of collaboration, hindering aspirations to provide joined-up travel options.”

The council’s depute leader Cammy Day said: “For the many employees across these companies who play such an important role in delivering essential services, particularly during the current COVID outbreak, I want to reassure them that these changes will not negatively impact on their jobs.

“Rather, as we lead the charge toward a zero-carbon future, we want to increase reliance on sustainable public transport, and as bus and tram use continues to grow, we’ll need more drivers and staff to run the companies.

“However, we can’t move forward with these aspirations as it stands – we know that the current structure has led to inefficiencies.

“Of course this will take time and a great deal of engagement and planning, but by driving better integration, ensuring improved governance and putting the needs of the public at the centre of public transport delivery, I know we can provide a system that future generations will thank us for.”