Bus firms in fresh warning over councils’ transport plan

Taxpayers could be hit with the cost of a failed bus network, transport operators have warned

Bus companies such as Stagecoach say a council takeover of services would leave taxpayers open to significant financial risks
Bus companies such as Stagecoach say a council takeover of services would leave taxpayers open to significant financial risks

Taxpayers could be hit with the cost of a failed bus network, transport operators have warned.

Bus firms have told Tyne & Wear councils they risk a “ticking timebomb” with their plans to take control of all services and fares.

Operators such as Stagecoach have opposed plans by council-backed transport group Nexus to prepare for London-style bus powers which will see the network controlled and underwritten by the taxpayer.

Stagecoach says recent analysis by transport consultant Chris Cheek shows the many risks which, if the services are council-controlled, would ultimately mean council tax bills being used to support any unsuccessful routes.

Mr Cheek, who has worked in the transport industry throughout his life, said one such risk comes from a promise by Nexus not to raise fares by more than inflation. With bus-driver wages lower in the North East than elsewhere, any attempt to lift salaries above inflation would slash profits from the routes.

Added to this, Mr Cheek says, is a concern that there is little Nexus could do to boost passenger numbers while opening itself up to various cost pressures.

Repeating a legal threat already hinted at by the bus companies, Mr Cheek warns that the Quality Contract process without payment to existing operators would amount to nationalisation without compensation and see the two sides head to the European courts.

Last night Stagecoach said the takeover plans “would raise fares and do nothing to improve services for bus passengers, as well as putting the jobs and pensions of bus workers at risk, and leaving Tyne & Wear taxpayers with a ticking financial timebomb.”

The spokesman added: “Local people should not be forced to pick up the bill for the black hole in the ITA’s budget and bus passengers should not pay more for less. We would urge the transport authority to make a genuine commitment to working in partnership with us to deliver better bus services.

“We have a plan that can do that now and save the authority money. It is important local people who want that to happen make their voice heard during the consultation.”

Greg Stone, an opposition councillor on the Integrated Transport Authority set to have the final say next year, said that he and others felt that an independent assessment of the “pros and cons of the Quality Contracts” model was “a missing piece of the jigsaw in Nexus’s recommendation to proceed with Quality Contract consultation”.

Welcoming Mr Cheek’s look at the plans, he said: “Significantly, the report also suggests that the Quality Contract decision is motivated by the transport authority’s long-term funding gap and seeks to meet it by a raid on the private sector operators. The bus companies, and their lawyers, may well take the view that this is illegal.”

The Labour chairman of the transport authority, Coun David Wood, said: “The Quality Contracts Scheme is about improving bus services, pure and simple.

“Based on its assessment so far, the transport authority believes a Quality Contract is the best way to ensure buses play their role in a simple, affordable and integrated public transport system planned and delivered in a similar way as bus services are in London and throughout most of Europe.

“We have been quite clear that the door remains open for bus operators to return with an improved partnership offer which addresses these issues.”

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