Newspaper article The Journal (Newcastle, England)

The Hidden Costs of Running Buses

Newspaper article The Journal (Newcastle, England)

The Hidden Costs of Running Buses

Article excerpt

Byline: JOHN CONROY

FEW people will be surprised to learn that the global economic situation is having a major impact on the public transport industry and, in particular, bus travel in this region.

What may surprise many though are the hidden factors which take their toll financially and influence the way we do business.

We are expecting a difficult year in 2011. The cuts in public sector spending and the Government's radical budget reforms will impact on the North East acutely.

With rising unemployment across the region, we expect to see a fall in passengers, particularly as fewer people travel to work on the buses.

In recent weeks we have all seen fuel price increases and this will be another burden for our business. Bus operators do not pay the full fuel duty. At present, we receive a rebate equivalent to around 75% of the duty element of the fuel price. However, as part of the Government's spending review, this fuel rebate will be reduced by 20% from April next year, which will result in a further rise in fuel prices of around 9p per litre.

Interestingly, the rail and aviation industry do not pay any fuel duty. It is one of life's little mysteries that in the greening of Britain, the aviation industry, perhaps one of the most ungreen industries, does not pay fuel tax.

Fuel costs and the global economic situation are both factors which everyone would expect to impact on a business. However, there are several more unexpected changes of a social nature which have a major impact on our company.

Many say the United Kingdom follows the United States, but is always several paces behind and that is exactly what is happening in the UK in the case of litigation. We are fast becoming a highly litigious nation where people believe the advertising slogan that "where there's blame there's a claim".

This modern day trait has a major impact on our company and has shaped how we do business. We now have to heavily rely on CCTV coverage to protect our customers, staff and assets.

Around 5% of our total costs are related to injury claims including both genuine and fraudulent claims.

We review CCTV footage to establish precisely what happened and where blame may lie. …

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