In 1925, public transport within the City of Worcester was provided by a network of electric tramways operated by Worcester Electric Traction Company Limited from their depot off the Bull Ring in St John's. Buses linked the City to locations not served by the tramway network, and from November 1914 these had been provided by Birmingham and Midland Motor Omnibus Company Limited (BMMO—Midland “Red” Motor Services). Both Worcester Electric Traction and BMMO were subsidiaries of British Electric Traction (BET) so there was no intentional competition between the two operations.
The Worcester Corporation (the local authority at the time) wished to improve transport in the ever expanding city but tramways are very inflexible and expensive to upgrade, and the Corporation had very little say in the British Electric Traction (BET) operations. With this in mind, on Wednesday 25th November 1925, Worcester Corporation gave notice of application for an Act of Parliament giving it the power to operate tramways, trolleybuses and motor buses in the City of Worcester and up to five miles beyond the city boundary. The Worcester Corporation Act received royal assent on Wednesday 4th August 1926, and with it the tramway operations and assets of the Worcester Electric Traction Company Limited passed to the Worcester Corporation.
The Corporation consulted the Birmingham Corporation Tramways and Omnibus Department for advice on how to best develop transport within the city, and were advised to slowly replace the tramway routes with trolleybuses, and to develop new routes with motor buses. However, after protracted negotiations the corporation decided to subcontract all of their public transport operations to BMMO, drawing up a contract that became known as the “Worcester Agreement”.
Worcester Corporation closed the entire tramway network at the end of operations on Thursday 31st May 1928, and the Worcester Agreement came into effect from the following day, on Friday 1st June 1928. To replace the trams, a new network of motor bus services with ‘W’-prefix route numbers was introduced, operated by BMMO on behalf of the Corporation. The existing Worcester (East Street) depot was not large enough to accomidate all the vehicles required, so in 1927 BMMO had acquired Worcester (Padmore Street) depot and converted it for bus use. The new site became operational when the services started and was used to house the fleet of new SOS “QL” single-deck buses (certain vehicles from registration numbers HA3725–3755) that BMMO allocated to the city for the new services.
BMMO were obliged to operate bus services to replace all routes on the withdrawn tramways network, and any other route in the city that the Corporation might require. New routes could be withdrawn by BMMO after a three-month trial period if they were found to be unsuccessful, but routes that replaced tramway services could not be withdrawn without the consent of the Corporation.
Under the terms of the Worcester Agreement, BMMO retained a proportion of the receipts to cover operating cost. This was calculated as the equivalent to 3d. per mile operated within the area specified by the 1926 Worcester Corporation Act. The remainder of the receipts passed to Worcester Corporation. On Monday 8th December 1952, the finances were renegotiated so that BMMO would retain 5d. per mile operated within the Corporation area, and this was back-dated to take effect from Wednesday 1st August 1951.
The initial contract was for a minimum period of twenty-one years, then continuing indefinitely thereafter until revoked by either party upon two-year written notice to the other. The Worcester Agreement ended by mutual agreement on Monday 31st August 1959 after BMMO successfully negotiated with the Corporation to end payments based on the amount of mileage operated. From Tuesday 1st September 1959, a new agreement came into effect whereby BMMO would pay the Corporation a fixed yearly amount for the right to operate buses within the city. This started at £7,000 for the first year, and was fixed irrespective of the amount of miles operated, number of passengers carried, or the amount of profit made.
The new agreement represented a considerable boost in profit for BMMO in Worcester as the amount they were now required to pay was less than one-quarter of the £33,980 received by the Corporation from BMMO in receipts for the previous year. Worcester Corporation still maintained some control over services as they retained the right to be consulted over any change to fares within their area, but local authority control would later be removed by the Transport Act of 1980.
The new payment agreement gave BMMO an incentive to improve services within the city as they could now keep any additional profits, and over the next few year a large number of new BMMO S16 single-deck buses arrived at Worcester (Padmore Street) depot, providing modern vehicles with increased capacity.
At the time of introduction the Worcester Agreement was considered successful and it became the model of agreements between local authorities and bus operators in other areas. For BMMO these included agreements with the Dudley Corporation in 1929, and over the next ten years with the Corporations of Smethwick, Oldbury, Tipton and Rowley Regis.