On 18 August 2026, the Prime Minister announced his support for West Midlands Combined Authority (WMCA) to take public control of the local bus network in West Midlands. Mobico Group, a parent company of National Express (the region’s largest operator, accounting for 94% of bus journeys in the West Midlands), has struck a deal to sell its remaining UK regional bus operators to WMCA. This comes after Mobico Group indicated that it was leaving the market to derisk its bus operations as the West Midlands region continues to move towards bus franchising. On the previous day – 17 August 2026 – WMCA issued the Invitation to Tender for the first tranche of the West Midlands Bus Franchising programme, marking the start of the formal procurement process.

The deal with Mobico Group and the initiation of the tender process furthers WMCA’s plans to bring bus networks under public control and protect routes through franchising and paying contractors to run the services for them in the longer term. The announcement also serves as an indication of how the Government’s devolution agenda may develop in practice. Following on from recent announcements about fiscal devolution, Government has said that this marks the next step in delivering greater control over public services to Mayors and local communities – and comes ahead of Liverpool City Region beginning to bring its bus network under public control from 6 September 2026.

For local government leaders, the more important question is what this says about the balance of responsibilities and functions between Central Government, Mayors, Combined Authorities (CAs), Combined County Authorities (CCAs) and local public services. This insight looks at the bus deal in more detail and what it means for devolution under the new Government.

An example of devolution in practice

In the Government’s announcement of 18 August 2026, the Prime Minister said: “When I said we would put power back into the hands of local communities, this is exactly what I was talking about. We’re not afraid to take bold action to protect people and we’re backing the Mayor to step in to save these vital bus services which millions of people rely on every day.”

The West Midlands bus deal demonstrates how devolution of power and functions can work in practice. When Mobico Group indicated that it was looking to derisk the bus operations in West Midlands, Government announced its support for WMCA to “step in” to secure continuity of service, protect jobs and maintain an essential part of the region's infrastructure, supported by Government funding and political backing.

The announcement of the Prime Minister’s support for WMCA’s move reflects a growing expectation that CA/CCAs, Mayors and local leaders will increasingly be responsible for ensuring the resilience and continuity of key public services within their areas.

Since the publication of the English Devolution White Paper in December 2024, Government has been consistent in its approach that devolution is central to its plans to drive economic growth and has been committed to providing Mayors and local leaders with stronger tools to shape the future of their areas.

Through the reforms introduced under the English Devolution and Community Empowerment Act 2026 and other initiatives such as No 10 North, Mayors and regional leaders are now being provided with additional powers to make decisions that shape jobs, transport, housing and public services in their area.

For local authorities, CAs and CCAs, the focus will be ensuring that appropriate governance arrangements and risk-assurance frameworks are in place that support the delivery of these schemes effectively.

How is the bus deal being funded?

As stated above, the West Midlands bus deal is an example of Government’s continued commitment to deliver devolution and public reform across the country through the provision of additional powers to Mayors and local leaders to make decisions about their local areas – but additional funding is also being required to deliver schemes that are considered necessary for essential public services.

WMCA has confirmed that the financial package will be funded mainly by the local authority through existing transport investment plans, with £11.5m of Government support for transaction-related costs over the next three years. Specifically, this new £11.5 million will fund specialist projects and legal advice, IT systems, as well as project support and delivery staff to keep the bus network up and running during the transition to public control.

Transport Secretary, Heidi Alexander, added that the funding being provided by Government “will help protect thousands of jobs and support the West Midlands’ move to franchising, so Mayor Richard Parker can build a bus network that puts passengers first.”

This funding is in addition to the £2 billion of funding being provided to WMCA over five years, which WMCA will have freedom to spend as they see fit.

A model that extends beyond transport

While buses are currently in the spotlight, the issues raised by this announcement will be familiar across other sectors such as adult social care, housing, skills and employment support.

Following the enactment of the English Devolution and Community Empowerment Act 2026, CA/CCAs will take on greater responsibility for public services and assets that have historically sat with local government.

This creates opportunities for local authorities to shape services around local need and improve outcomes for communities. Equally, it increases the importance of effective governance, risk management, procurement, stakeholder engagement and public accountability.

What should local authorities, Combined Authorities and Combined County Authorities be considering?

The focus of local authorities, CAs and CCAs should be on ensuring that their constitution, governance arrangements and other processes are sufficient and allow for effective and safe decision making to take place in light of the new powers and functions now being afforded to Mayors, local leaders and CA/CCAs.

The West Midlands bus deal highlights several issues that are likely to become increasingly relevant as devolution progresses. These include:

• All authorities will need robust governance arrangements and decision-making processes in place to support the delivery of complex schemes, such as the bus franchising schemes in West Midlands and Liverpool City Region.
• All CA/CCAs must have processes in place to manage operational and financial risk arising from greater control of services and funding being provided by Government.
• Local authorities, CA/CCAs must ensure procurement and commercial arrangements remain robust and deliver value for money.
• All authorities will need to ensure it remains compliant with the transparency and accountability requirements in relation to any key decisions.
• CA/CCAs have a particular role in ensuring that any schemes being delivered reflect the wider growth and regeneration objectives for their areas.

Conclusion

Since the enactment of the English Devolution and Community Empowerment Act 2026, discussion around devolution is increasingly moving beyond whether powers should be transferred to local areas but rather how devolution could work in practice – the WMCA bus deal is an example of this agenda in motion. The time has come when policy turns into practice.

The story of the bus deal coming out of WMCA also shows that the focus is now turning to how Mayors, local leaders and CA/CCAs can use those powers effectively, and the governance frameworks that are needed to support them.

How Capsticks can help

Our Local Government experts are supporting local authorities, CAs and CCAs as they manage the implications of devolution and new funding arrangements in a period of change for the sector.

To discuss anything relating to the contents of this insight or the impact of devolution on your organisation – including any legal, governance or engagement issues – contact our Head of Local Government Tiffany Cloynes or Legal Director Rebecca Gilbert to find out more about how Capsticks can help.