Bus shake-up could be a ‘tax timebomb’, warns firm

FUNDING WARNING ... bus firm Stagecoach says council tax payers could face big bills.
FUNDING WARNING ... bus firm Stagecoach says council tax payers could face big bills.

SOUTH Tyneside taxpayers risk living with a financial “ticking timebomb” if a bus shake-up gets the go-ahead, it has been claimed.

Bus firm Stagecoach has warned councils in Tyne and Wear that its plans to take control of all services and fares could hit local people in their pockets.

The company is opposing plans by council-backed transport group Nexus to prepare for London-style bus powers which will see the network controlled and underwritten by the taxpayer with bus firms being employed to run services on fixed contracts.

In July members of the Tyne and Wear Integrated Transport Authority (ITA) agreed a 14-week consultation period over plans for ‘Quality Contracts’.

Now analysis by transport consultant Chris Cheek outlines many risks which, if the services are council-controlled, would ultimately mean Council Tax bills being used to support unsuccessful routes.

Mr Cheek said one such risk comes from a promise by Metro owner Nexus not to raise fares by more than inflation.

He also claims that because bus driver wages are lower in the North East than elsewhere, any attempt to lift salaries above inflation “would slash profits from the routes”.

A Stagecoach spokesman said the takeover plans “would raise fares and do nothing to improve services for bus passengers, as well as putting the jobs and pensions of bus workers at risk, and leaving Tyne and Wear taxpayers with a ticking financial timebomb.”

The spokesman added: “Local people should not be forced to pick up the bill for the black hole in the ITA’s budget and bus passengers should not pay more for less. We would urge the transport authority to make a genuine commitment to working in partnership with us to deliver better bus services.

“We have a plan that can do that now and save the authority money.

“It is important local people who want that to happen make their voice heard during the consultation.”

South Tyneside councillor Gladys Hobson, the vice chairman of the transport authority, said the concerns raised were “premature”.

She said: “No decision has been made whether we go with the Quality Contracts or the bus partnership.

“We need to wait and see what the ultimate decision is. From next April the new North East Leaders Group will have the responsibility for transport issues.”

The Labour chairman of the transport authority, Coun David Wood, said: “The Quality Contracts Scheme is about improving bus services, pure and simple.

“Based on its assessment so far, the transport authority believes a Quality Contract is the best way to ensure buses play their role in a simple, affordable and integrated public transport system planned and delivered in a similar way as bus services are in London and throughout most of Europe.

“We have been quite clear that the door remains open for bus operators to return with an improved partnership offer which addresses these issues.”

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