Stagecoach in warning to shareholders over local authorities battle

A bus showdown is looming as Stagecoach warns shareholders of a potential legal battle with local authorities

Transport bosses from the five Tyne and Wear councils will next week decide if they should seize control of the bus network and become the first in the country to turn back the clock to the days of civic leaders running the buses.

Members of the integrated transport authority will be asked if they want to back a Q uality Contract process.

It would will see councils set the fares, the routes and even the colour of the buses after growing fed up with the service they receive. Under the new plans, they would hand out strict contracts to bus operators, setting out who can go where and when.

Councillors, though, have been told that despite bus companies in the region receiving �62m worth of public funds a year, their voluntary alternative to council plans includes a saving of just �250,000.

Now bus firms are gearing up for a fight, insisting a voluntary way forward can offer more value to passengers.

In their most recent accounts Stagecoach, one of the biggest operators, warned shareholders of the potential for trouble.

The accounts said: “Stagecoach is firmly opposed to Quality Contracts and there is no evidence of market failure in Tyne and Wear where bus passenger satisfaction is among the highest in the UK.

“We will vigorously resist any proposals to introduce Quality Contracts in the areas where we currently operate.

We believe the highly centralised, inflexible and bureaucratic approach of Quality Contracts would result in poorer value for money for taxpayers, inefficient bus operations and a worse service for customers.” Already the bus firms have suggested they will seek legal action against what would be England’s first use of Government bus powers.

There’s also a warning that while the firm makes a healthy profit from London’s regulated bus market, savings will continue to be sought across the firm’s transport empire.

Wearside MP Bridget Phillipson has been campaigning for what would effectively be the re-nationalisation of the region’s major bus routes.

She told The Journal: “The transport authority will soon vote on whether to introduce London-style bus regulation. “I have long campaigned for councillors to support introducing such a scheme. I believe it will benefit travellers, improve our transport network and offer better value for money for the taxpayer.

“The bus operators should respect whatever decision is reached. It would be highly irresponsible of them to pursue unnecessary, unwarranted and costly court action."

A Stagecoach spokesman said: "We are continuing to invest heavily in new vehicles and service improvements for our customers in Tyne and Wear to attract even more people on to our greener, smarter bus services.

"As we have previously stated, the best way to deliver an improved bus network across the region is for Nexus to work constructively with bus operators to deliver a quality partnership.

“This would provide a better, simpler and more flexible bus network for passengers as well as affordable fares, smarter multi-operator ticketing, and new vehicles. A partnership approach could bring benefits to Tyne and Wear bus passengers within months.

"In contrast, a Quality Contract system would take years to implement and would be hugely expensive for taxpayers in the North East. The success of the franchising system in London is a misguided argument for the introduction of a bus contracting system elsewhere in the UK.”

 

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer