Stagecoach boss threatens to axe 500 North East buses

Stagecoach chairman Sir Brian Souter has threatened to axe 500 North East bus services if council chiefs try to take control

A Stagecoach bus in Newcastle
A Stagecoach bus in Newcastle

Stagecoach chairman Sir Brian Souter has threatened to axe 500 North East bus services if council chiefs try to take control.

Sir Brian, one of the richest men in the UK, said he would rather pull out of Tyne and Wear and close four depots than work under a council-agreed contract.

The Stagecoach founder, who has a personal wealth of around £730m, hit out at the “unreconstructed Stalinists” on the region’s transport authority as they prepare for London-style bus powers.

Under council-backed plans, transport group Nexus is putting together what is expected to be the UK’s first Quality Contract, in which only buses with a council contract can operate in Tyne and Wear.

The plans would introduce a similar system to that in London, in which Stagecoach operates at a profit. All buses would be branded the same, with local authorities setting fares, timetables and routes.

Nexus came up with the plans amid concern the current bus network did not do enough to justify a multi-million pound council subsidy. Council transport officials have said that without the takeover they are likely to axe school buses, concessionary fares and some Metro discounts.

Already bus companies have consulted lawyers on fighting the plans, which Nexus said could be in place by 2015.

Speaking at a bus conference, and reported in Trade magazine Passenger Transport, Sir Brian said: “They sold the bus companies to us in the first place, knowing what the system was. They took the money off us, we bought it in good faith. We have invested in it every year.

“We have, I think, had one day or two days’ industrial stoppage in the two decades that we have been running it.

“We are dealing with a bunch of unreconstructed Stalinists who are completely driven by political dogma.

“The first contract that they put out on my business, I’m out of Tyne and Wear completely, and they can buy 500 buses and find four bus depots. And when they do that, they’ll find that what I am delivering with my 500 buses and my four bus depots, and my fantastic workforce, is actually very good value for money.

“That’s why I am so hard on the issue, because unless you’re prepared to be as robust as that, then you’ll have your business taken off you incrementally.

“They’ll pick the bits that they want and you’ll be left with a carcass, and I’m not waiting around to watch it happen.”

In the North East, Labour has backed the bus plans, with Wearside MP Bridget Phillipson leading a campaign for better bus services.

Speaking to The Journal, she said: “From the start, Stagecoach’s opposition has been characterised by scaremongering and negative tactics. Under Quality Contracts, they would be free to bid to run routes exactly as they do in London. Mr Souter’s sole concern is to defend his inflated profit margins in the region. We need a bus system that works in the best interests of local people and offers better value for the taxpayer.”

A Nexus spokesman said: “Our proposals for a Quality Contracts Scheme represent an opportunity to provide better bus services while saving the taxpayer £70m over the next 10 years.

“Local people who make 140 million journeys every year will benefit from simple fares, cheaper tickets for young people, universal smartcard travel, a single source for customer services, a greater say in how routes are planned and improvements in journey quality.

“If we don’t take action now to re-invest more of the profit buses make, then widespread cuts are inevitable from 2015, hitting families, bus company staff and the vulnerable in our communities hardest.”

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