UK government ministers have been urged to revamp the bus procurement rules after Alexander Dennis announced the closure of its Falkirk plant and conversion of its nearby Larbert facility in a shake-up that will put 115 jobs at risk.
The company, which last week won an order for 123 zero-emission buses, will turn Larbert into a chassis manufacturing site, safeguarding 200 jobs, and 350 in total in Scotland.
Alexander Dennis said it would retain the flexibility to reintroduce bus body manufacturing to its Larbert facility at a later date.
The proposal follows earlier plans to close both Scottish sites that would have seen 400 jobs lost.
Today’s announcement confirms a report in Daily Business last week that the new order, through the latest Transport Scotland funding round, would not guarantee all the work would stay in Scotland. The order includes 69 single deckers and Falkirk has never built single deckers.
It also confirmed that the UK domestic bus manufacturing sector has lost significant market share in 2025, with 51% of all zero-emission buses purchased in the UK sourced from overseas manufacturers – an increase of 25 percentage points from 2024. This was also reported by Daily Business ahead of last week’s announcement.
These increased purchases from non-UK bus manufacturers have occurred even as UK taxpayer funded contributions in the industry increased.
In last week’s £45 million ScotZEB3 funding round, Edinburgh coach operator Ember was awarded the largest share – £13m – to buy 100 Chinese electric coaches.
It prompted Sandy and James Easdale, owner of McGills’s, to threaten legal action after their bid, which would have been worth £16m to ADL, was rejected.
“The Scottish Government hasn’t got a clue what it’s doing when it comes to supporting Scottish business,” said Sandy Easdale.
“Jobs are now on the line at Alexander Dennis, yet ministers and their quango Transport Scotland turned their backs on a project that would have backed Scottish manufacturing and taken diesel buses off our roads. It beggars belief.
“Instead, they’ve chosen to throw public money at supporting a new intercity coach operator and backing Chinese jobs.”
However, Ember ordered buses from China because ADL does not build the vehicles, specifically the coaches, that it requires.
It has been pointed out that McGill’s, which received £8.66m for 41 buses through ScotZEB1 and was part of a Zenobe-led consortium which was awarded £41.7m for 42 buses through ScotZEB2, has also bought from a non-UK builder when the specific vehicles it required were not produced by ADL.
ScotZEB operates as a capital grant subsidy scheme rather than a procurement exercise and bus procurement decisions are undertaken by operators which must comply with relevant legislation and regulatory requirements.
While zero emission buses supported through the scheme will operate in Scotland, the scheme is designed to comply fully with the Subsidy Control Act 2022, including Section 17, which prohibits local content requirements as a condition of subsidy.
Deputy First Minister Kate Forbes today led calls for reforms to the procurement and subsidy control legislation which would allow more work and contracts to go directly to Scottish firms, such as Alexander Dennis.
“For many months, the Scottish Government worked intensively with Alexander Dennis and the workforce to secure the company’s future, protect jobs, skills, and industrial capability in Scotland,” she said.
“We created a furlough scheme, the first of its kind in Scotland, which was an unprecedented intervention to save Scottish jobs which would otherwise have been lost, and Alexander Dennis secured orders for more than 100 zero-emission vehicles through our £45 million ScotZEB3 Fund.
“Meanwhile, the UK Government has been sitting on its hands when it comes to the policy levers which would make a vital difference to order numbers at Alexander Dennis and support domestic bus manufacturing in Scotland.
“Labour ministers are shamefully silent on the promises they made, including changes to current procurement rules which favour foreign competitors, something the Scottish Government and trade unions have consistently called for.
“It is vital that the UK Government ensures a long-term pipeline of orders and a supportive approach to reserved matters such as subsidy and procurement. A first step would be changes to the Subsidy Control Act 2022 in order to create that pathway for procurement reform.
“The future viability of companies such as Alexander Dennis with a long history and commitment to Scotland depends on the UK Government to acting now.”
Paul Davies, Alexander Dennis president & managing director, said: “The increased purchases from non-UK bus manufacturers have occurred even as UK taxpayer funded contributions in the industry increased.
“Recent government interventions have also fallen far short of the bold and decisive action the industry needs and risk domestic manufacturers losing even more market share to overseas competitors.
“The output of the UK Bus Manufacturing Expert Panel does not place enough focus on the significant jobs and economic contribution the domestic bus manufacturers make to the UK.
“In addition, the results of the ScotZEB3 scheme are incredibly disappointing, with the majority of the funding going overseas to support bus and coach manufacturing in China.
“We continue to repeat the same calls to both governments to level the playing field, recognise the cost of manufacturing in the UK and the fact that these higher costs flow through the supply chain. Manufacturing in this country needs to be better supported if we are to generate the economic benefit that the country so badly needs.”
He said the proposed plans for Larbert “represents the best possible outcome for our business, employees, customers and supply chain partners in the current climate.
“This new approach would enable us to better align with the current market whilst improving our efficiency. It also allows us to continue to adapt to rapidly changing and challenging market dynamics.
“We remain grateful to the Scottish government for the furlough scheme support to secure these jobs, maintaining skills and manufacturing capability in central Scotland. We will continue to work with the Scottish Government, its agencies and the trade unions to support staff during the consultation period.
“We are absolutely committed to doing the right thing by our team members and our stakeholders to protect jobs, invest in our business and maintain strategically important manufacturing capability in Scotland.”
The 26-week furlough scheme began on 22 September last year and ended on 22 March. The company remains in discussions with the Scottish Government around the terms of the furlough agreement.
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