Private bus companies should “look in the mirror and in their accounts” before making deep cuts to vital North East services, Newcastle’s council leader says.
Nick Forbes hit out at the region’s bus operators ahead of devastating cutbacks due to be made over the coming months, once the government’s Covid bailout funding for public transport is withdrawn at the end of March.
It is feared that, with passenger levels still well below pre-Covid rates, bus operations across the North East could be slashed by up to 17% – potentially meaning less frequent services in both cities and rural areas, or the least popular routes being axed entirely.
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On Wednesday, councils in Tyne and Wear formally agreed to a £4.1m increase in their levy payments to crisis-hit Metro operator Nexus that will be used to rescue some bus services from closure.
But that money will in fact only balance Nexus’ books and keep its funding for ‘secured’ bus services at current rates, in practice only preventing even worse cuts than are already thought inevitable.
Coun Forbes said that, despite having to make budget cuts of their own, councils had no choice but to stump up the extra £4m or risk facing a “wholesale collapse of our bus routes and services”.
But the Labour councillor told the North East Joint Transport Committee (JTC) that bus companies must “look in the mirror and in their accounts at the amount of profit they made last year”.
It was reported in December that Stagecoach, one of the region’s big three bus operators, had made profits of £32.9m – more than double than in the previous year.
Speaking at a Newcastle City Council meeting later that night, Coun Forbes also urged bus companies to present their cut proposals for democratic scrutiny in front of a new “bus board”.
He said: “People need a voice about buses now more than and I am determined to make sure they are heard. I am also fully committed to defending as many bus routes and services as possible in this city, in marked contrast with the Conservative government which appears content to allow them to wither and die.”
Go North East boss Martijn Gilbert, chair of the North East Bus Operators’ Association (NEbus), claimed that there “have been no profits from bus services for nearly two years” and that the removal of government support means “we now approach a cliff edge, many services have started to become seriously loss making”.
He added that companies would “welcome the opportunity for more proactive engagement with the regions' political leaders through things like the bus board”, versions of which are being established across the region as part of a new partnership with councils.
Mr Gilbert said: “Bus operators are currently at the pre-notification and engagement stage of potential changes to bus services. The changes reflect the harsh financial realities of the impact of the pandemic and the likely ending of Government funding support, further compounded by the impending 20% cut to Nexus’ reimbursements for accepting the free bus pass, and rising costs such as a 7.1% increase in Nexus bus station departure charges.
“We are, however, taking a long-term view with network changes and many services that will be loss making will continue to be operated by us without support where the opportunity to continue to grow passenger numbers and revenue is a realistic prospect.
“Unfortunately though, some services were poorly performing before the pandemic hit and are now very unlikely to ever recover to a sustainable level, so will need to change.”
Nexus faces a £21m shortfall of its own in 2022/23, with bailout funding for the Metro also being withdrawn.
Under delayed budget plans approved by the JTC on Wednesday, it will:
- Make a £7.5m reduction in money used to reimburse private bus companies for carrying passengers with free bus passes;
- Find £2.4m of ‘efficiency savings’ from the Metro – including a pay freeze and contract renegotiations;
- Increase Metro’s revenue by £1.6m, including via a ticket price hike;
- Spend £5.6m of Nexus’ reserves;
- And have the five Tyne and Wear councils increase their levy payments to Nexus by the agreed £4.1m.
