Bus services on the chopping block as transport chiefs face £20million shortfall

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North East bus services face major cuts and cash-strapped councils will have to step in to avoid key public transport routes being slashed amid a budget crisis, worried bosses have warned.

Regional leaders have pleaded with ministers to reverse their decision to remove Covid bailout funding that has propped up the ailing Tyne and Wear Metro network since the pandemic hit, as emergency plans are drawn up to plug a £20million black hole.

Government money to cover local rail services’ losses while passenger numbers remain below pre-Covid levels is set to be withdrawn next April, a move that will plunge Metro operator Nexus into a dire financial predicament.

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The public body warns it is now expecting a shortfall of £20.8million in 2022/23, as patronage is not forecast to have returned to normal by then, and will set out drastic plans to tackle the crisis this week.

Bus services could also be hit.Bus services could also be hit.
Bus services could also be hit.

It has long been feared that cuts to the Metro would spark a spiral of decline and ultimately cause the network’s closure, so reductions in train services are understood to be unlikely.

But services such as the Shields Ferry and certain bus routes could soon be on the chopping block.

Nexus says that, unless the Government can be talked into a U-turn, it will have to:

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:: Cut £7.5million from a budget used to reimburse bus companies for carrying passengers with free bus passes. Nexus warned that this “represents a major source of income for local bus operators and its reduction will increase pressure on bus companies’ finances”, meaning some routes could be left with reduced bus frequencies or hours;

:: Find “efficiency savings” of £2.4million and attract more Metro passengers to increase Nexus’ yearly income by £1.2million;

:: Spend £5.6million of Nexus’ reserves;

:: Ask Tyne and Wear councils to increase their levy payment to Nexus by £4.125million – or cut Metro, Shields Ferry, and Nexus’ bus services to save the same amount.

An ominous report to the North East Joint Transport Committee warns that a dramatic 40% reduction in Metro train services would save just £3.7million and result in such a catastrophic fall in ticket revenue that it would create an ever bigger deficit that would “require additional subsidy or, in all likelihood, lead to the closure of the system”.

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If Newcastle, Gateshead, Sunderland, North Tyneside and South Tyneside councils are unwilling to up their payments to Nexus, the £4million cuts would therefore likely come from the Shields Ferry and Nexus’ secured bus services – which include school buses, early morning and late night services, and routes to outlying areas that are not considered commercially viable.

Gateshead Council leader Martin Gannon, chair of the North East Joint Transport Committee (JTC), says there will be “almost certain cuts” to bus services and either “an increased burden on our cash-strapped councils in Tyne and Wear or even bigger cuts to public transport”.

The stark warning comes just weeks after an £806million plan to improve the North East’s bus network was unveiled.

Coun Gannon urged the Government to pledge renewed bailout funding to cover Nexus’ Covid-related losses, despite more than £50million having been provided so far.

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The Labour councillor said: “The Government could very easily act to fix this problem in the same way it already has with the national rail network. Everyone agrees that the Metro is an essential, well-managed and efficient transport system, and there is no dispute that the financial shortfall is caused by Covid-19.

“The Government’s lack of Covid-19 support for the Metro will lead to cuts to bus services, which is the direct opposite of what we want to achieve.

"But even worse we face a ‘Hobson’s choice’ of either an big increase in the burden borne by Tyne and Wear councils – at a time that they are already having to cut other services to balance their budgets – or to face an even higher level of cuts to the public transport services that underpin our economies and knit our communities together.

“Only regions like ours that operate light rail systems face this problem; rail commuter networks all over the country are being bailed out by the Government. How fair is that?”

He added: “We keep knocking on the door, but the Government seems determined to keep the lights switched off and pretend that nobody is at home. We must now ask publicly: please help us.”

Nexus’ plans will be presented to the JTC on Tuesday, with a final decision to be made in January.

The Department for Transport was contacted for a comment.

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