Merseytravel could be forced to use emergency funds to keep some vital services afloat.
Low visitor and passenger numbers to major city attractions and transport networks could require the region’s travel body to dip into its reserves for the next financial year to ensure provisions are maintained.
A report to Liverpool City Region Combined Authority's transport committee has identified the “key financial risks” facing Merseytravel moving forward as well as the amount available to support any necessary spending.
READ MORE: The future of Mersey Ferries and the Beatles Story are delicately linked financially
More than £55m is held in reserve for the body to access.
The report, to be heard in public on Thursday, details how the fortunes of the Beatles Story at the Albert Dock and the Mersey Ferries are delicately intertwined.
It said that failure of the popular musical attraction to return to pre-pandemic visitor levels would have a direct impact on the longer-term finances for Ferries.
This is due to the Beatles Story “historically” generating a net profit which has flowed through to Mersey Ferries to reduce the operating grant required from Merseytravel to support its operations.
While current projections for 2021/22 are aimed at achieving a break-even position, the report said “there is a risk that visitor numbers remain subdued and trading is lower than anticipated” and longer term profitability could be impacted.
There is “some confidence” that the Ferries’ budget position can be achieved but uncertainty remains around passenger numbers increasing to levels seen before Covid.
The report said: “There is also a concern as to whether the level of tourist trade will return as leisure income is a significant element of Ferries revenue.
“The impact on Ferries is two-fold: firstly, income generated from services may fail to recover thus requiring a continued increase in the financial support required from Merseytravel which would secondly be exacerbated should dividends fail to flow through from the Beatles Story.”
Contracts being handed back or services being deregistered as a result of inflation within the bus market have also been identified as pressures facing Merseytravel.
The report said while there is more certainty around bus recovery funding and its sufficiency, the return of contracts amid inflationary pressures would “place upward pressure on the bus budget” should Merseytravel add new supported services and provide new contracts that would exceed the value of previous tenders.
Members of the transport committee will discuss the findings at the CA chamber at Mann Island later this week.
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