ICSM Business News: bus companies fall into administration across the UK as economic pressures mount up

ICSM Business News: bus companies fall into administration across the UK as economic pressures mount up

By Harry Mottram: Last month Bournemouth’s Yellow buses stopped running after the company ceased trading – but it isn’t the first public transport operator to collapse this year.

Yellow Buses was the trading name of Bournemouth Transport Limited, appointed Simon Rowe and Rachel Hotham of professional services firm Milsted Langdon as joint administrators at the end of July who then pulled the plug on the city’s bus service.

It left a string of supplies from diesel wholesalers to cleaners and office suppliers out of pocket and the staff of 300 out of work. Many of the drivers were taken on by rival company More Bus but it means many routes have now been axed meaning a hit to the local economy with people unable to shop or go to work and having to find alternative transport or stay at home.

One supplier told ICSM that there had been problems in getting paid for months by Yellow Buses with overdue invoices and a reluctance to invest in an ailing infrastructure. But the collapse is not the first in the industry this year with HCT Group slashing services across the country in a desperate bid to stay afloat this summer. The social enterprise transport group has grown to be a nationwide operator since the 1980s but has been closing down services in Bristol, Yorkshire and London as they struggle to survive.

The hit most transport firms took during Covid has continued with a fall in passenger numbers as some customers opt to work from home or simply retire early. However, overheads such as fuel have increased along with interest rates compounding loans taken out which have seen debts bring down various outfits.

HCT’s Powell’s Bus in Yorkshire went bust in August ceasing 26 routes in Sheffield and Rotherham blaming debts and cash flow on the collapse. Other operators this year to shut up shop include John Keenan & Sons (Darwin Garage) Ltd of Coalhall in Scotland who ceased trading in February, and Mayne Coaches limited of Warrington have also hit the buffers this year.

Previously during the last couple of years largely due to a mix of Covid, Brexit, driver shortages, interest rate hikes, debts and inflation has seen Sea View Coaches in Dorset go bust, Lamberts Coaches of Suffolk, King's Lynn based East Anglian Holidays Ltd, CT Plus in Yorkshire, Coventry-based transport company Travel de Courcey,  coach tour operator Shearings Holidays, Gibson Direct Ltd, based in Renfrew and many more have all gone west.

Ian Carrrotte of ICSM said it was particularly galling for suppliers who were often ‘led up the garden path’ by clients who were in reality insolvent and who kept promising payment before ceasing trading with no warning. He said: “We saw with Yellow Buses that even the drivers didn’t know they out of a job until they turned up for work. If a firm is in trouble, they owe it to their staff and suppliers to announce trading is difficult and administration is a strong possibility. That allows suppliers to pivot to find new customers and minimise losses and staff to look for new employment. Trading while insolvent is illegal, and many firms seem to be in a grey area of business before the collapse.”

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