Tuesday 24 July 2012

First to pull out of North Devon

First Devon and Cornwall have announced plans to discontinue its bus services in the North Devon area, including closure of the Barnstaple depot. The company also confirmed that it has started the collective consultation process with trade unions on the possibility of redundancies.

Firsts bus services in North Devon have underperformed for a number of years, despite the introduction of a variety of marketing and promotional initiatives. The company is now faced with extra cost pressures due to the economic climate and cuts in external funding and routes are now being discontinued in order to ensure the long term sustainability of operations elsewhere.

A range of alternative options including the potential sale and transfer of employees and assets to Stagecoach Group plc were fully explored. That option will no longer go ahead following the Office of Fair Trading's announcement on 10 July that it was referring the case to the Competition Commission.

Giles Fearnley, FirstGroup Managing Director, UK Bus, said: "We understand that this news will be distressing for employees affected by the decision and that it will similarly cause our customers in the area some concern. We apologise and will be supporting affected employees over the coming months, as well as working with Devon County Council on the future of bus services in the area. We will give customers ample notice of the date that services will cease to operate in North Devon.

"We will be working hard to minimise the extent of redundancies, trying to redeploy people where possible. We would like to take the opportunity to stress that the decision to close the North Devon operation is a business driven one and does not reflect on the effort or individual performance of the employees in North Devon.

"We are progressing our strategy to reposition and rebalance our UK Bus portfolio to restore operating margins and help facilitate improved growth and returns. The decision by the Office of Fair Trading to refer our proposed sale of our North Devon operations, where we had a uniquely high degree of overlap with Stagecoach, was disappointing. We are confident, however, of future successful transactions in the coming months as a number of potential bidders exist in the markets where we have identified other businesses for disposal.'

First Devon and Cornwall has begun its official consultation process with affected staff. This will include offering opportunities in other areas. The timescale for closing the business will be confirmed once the consultation with the affected employees has been completed.


Focus Comment. 
At the risk of stating the obvious, the Office of Fair Trading have done a great disservice to the employees of First North Devon and the passengers that use the buses in this area. Stagecoach were willing to take on the loss making services, but pulled out when the proposals were referred to the Competition Commission. Stagecoach were not prepared to invest the time and effort in dealing with the matter and as a result everyone will now loose. Jobs will go, passengers will loose their services and it demonstrates how, once again these 'vandals in suits' from the Office of Fair Trading and  the equally misguided Competition Commission can completely fail to appreciate basic business sense when it comes to the bus industry.