Wednesday 31 July 2013

Stagecoach Accuses North East Councils of Funding Gap Cover Up

Stagecoach has accused north east councils of seeking to take over its routes just to plug a multi-million pound funding gap.
The company has criticised a decision by the five Tyne & Wear councils to begin the legal process needed to take control of routes and fares.

 Vehicles owned by Stagecoach, Go North East and Arriva squeeze through the centre of Newcastle yesterday. Under the Quality Contract proposals all of these routes would come under control of Nexus and be put out to tender.
The firm says they and others are being targeted not in a bid to improve services, but because councils have no other way of covering a funding gap.
Metro-owner Nexus has secured an agreement from the five councils to start a process which will see London-style bus powers introduced by 2015.
Councillors said the takeover is needed to prevent staggering cuts to concessionary fares, school buses, the Metro Gold Card service and the Shields Ferry.
More than £10m a year is handed to bus firms in the region in subsidies for otherwise unprofitable routes.
Bus firms, though, have claimed that councils are not being honest about the huge cuts they are planning in support for public services.
Stagecoach said the bus takeover is being sold as a bid to improve customer services rather than a last-ditch attempt to cover a funding crisis.
A Stagecoach spokesman said: “It has been clear from the start that Nexus and the transport authority have been biased.
“They have ploughed almost all of their efforts and more than £600,000 of taxpayers’ money into trying to justify a bus contracting system, and at the same time they have not been serious about discussing a voluntary partnership.
“These proposals are nothing to do with the quality of buses in Tyne & Wear. The region’s bus system has one of the best levels of customer satisfaction in the country.

 Some routes within Tyne & Wear are subsidised by Nexus. This is a Go North East vehicle
operating a Nexus route in Whitley Bay in Nexus livery
“All the evidence and the view of independent organisations shows partnerships deliver better bus services more quickly and at lower cost than a slow and bureaucratic bus contracting system.
“This is actually a misguided attempt by the transport authority to plug a growing black hole in the region’s transport budget.”
He added: “We believe there is a better way forward. We would urge Nexus and the transport authority to put bus passengers and local taxpayers first and work constructively with us on a partnership that will deliver better, more sustainable bus services.”
Nexus has pointed out that instead of profit margins of up to 23% that bus companies in the North East make now, under the new system they can expect something nearer the figure they make in London, where Stagecoach reports a 9.5% margin.
Tobyn Hughes, deputy director of Nexus, said: “The proposals we are consulting on set out in clear detail how it is possible to provide better bus services while reducing the cost to local taxpayers by £70m over a decade.
“The ITA would fund improvements by taking control of fare revenue from private companies and re-investing a greater proportion of the profit buses make in Tyne & Wear in local services.”