Shadow transport secretary Maria Eagle has told the Labour party conference she wants to help councils in Tyne & Wear in their battle to seize control of all routes by 2015.
Council-backed transport group Nexus is currently consulting on plans to contract out all services, with councils setting fares, routes and timetables.
Bus companies are set to fight the plans, with a threat of legal action already under way. The region’s biggest firms have claimed the takeover is actually intended to fill council black holes, while city leaders say they will have to axe school buses if the move does not go ahead.
Now Ms Eagle has told the party conference that David Cameron is hindering change.
She said: “His franchising fiasco has put the brakes on local control over rail. His decision to rig bus funding now penalises authorities that pursue reform.
“I pay tribute to Labour councils and councillors that are determined to fight for a better deal for passengers. Like David Wood, the chair of Tyne & Wear Integrated Transport Authority, now – with his colleagues – pursuing the first ever Quality Bus Contracts. Leading the way and others will follow. Reversing the failure of bus deregulation. Tackling the cost of living crisis.
“And a One Nation Labour government would make it easier. A simpler, faster route to reform. Devolved funding to give transport authorities greater clout.
“Deregulation Exemption Zones, so Government can give them the backing they need.
“Let me say this to those bus companies that are opposing reform: You already bid for contracts to run rail services. You already bid for contracts to run buses in London. And across Europe. And you can do so in Tyne and Wear. And wherever councils want to secure a better deal.”
David Wood, the chair of Tyneside’s transport authority, met Ms Eagle to discuss the moves.
He said the quality contract takeover would “at a stroke wipe out the days of operators withdrawing socially vital bus routes just because they don’t make a profit.”
Mr Wood added: “We are willing to work with bus operators but their current offer goes nowhere near to what we believe a Quality Contract proposal would save.
“How much longer should we see public money going straight into the pockets of bus company shareholders when we believe there is a much better way to deliver services to the travelling public and getting much better value for money.