Legal threat for Nexus in North East bus takeover bid

Stagecoach bus chiefs have taken legal advice as transport group Nexus looks to introduce Quality Contracts in the region

Bus companies such as Stagecoach say a council takeover of services would leave taxpayers open to significant financial risks
Stagecoach have taken legal advice over takeover plans for bus routes in the region

Bus chiefs across the North East have taken legal advice as they gear up for a court room showdown with council leaders set on taking over their routes.

The five Tyne & Wear councils have begun the work needed to effectively nationalise bus routes in the region, with the councils hoping to hand out contracts for set routes and fares in London, by 2015.

As that consultation continues, Stagecoach, one of the most robust opponents to the scheme, has confirmed that the potential for costly legal action is gearing up.

Such a move could eventually see the bus battle end in the European courts, as council-backed transport group Nexus looks to become the first in the country to use the takeover powers.

Stagecoach has said Nexus is “abusing legislation that was designed to tackle failing local bus markets,” adding that Tyneside has “one of the best bus networks in the country.”

The firm revealed that all the operators had taken legal advice and were “very clear” they had a “strong legal position” to challenge any council move.

At the centre of the dispute are plans by Nexus, owner of the Metro system, to introduce Quality Contracts into the region, in which councils set all routes, fares and timetables.

Nexus would pay bus operators to run Nexus-branded buses, with the councils taking the fare receipts and covering any losses.

Over the last two years, bus firms have been strong opponents. Already Stagecoach boss Sir Brian Souter has said he would rather “take poison” than hand over control of his buses to Nexus.

The threat of legal action was backed last night by Kevin Carr, managing director of Go North East, the region’s largest bus company.

He said: “We remain firmly committed to the partnership approach that offers people cheaper fares and more say over their buses from early next year.

“We’re marking our centenary by investing in a state-of-the-art bus depot and 100 new buses, meaning that almost a quarter of our fleet will offer free wifi and improved standards of comfort and reliability. In contrast, Nexus’ scheme is unaffordable while the present squeeze on local government finance continues.”

Nexus has made clear that bus fares have risen an average of 3% above inflation for the last decade while the proposals say fares would rise on average no more than inflation for the next 10 years.

Consultation documents produced by Nexus set out how improvements can be made ‘without raising taxes’. It says the proposal will cost local taxpayers £70m less over 10 years while protecting and improving services.

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