Newspaper article The Journal (Newcastle, England)

Takeover 'Timebomb' Bus Firms in Fresh Warning over Councils' Transport Plan

Newspaper article The Journal (Newcastle, England)

Takeover 'Timebomb' Bus Firms in Fresh Warning over Councils' Transport Plan

Article excerpt

Byline: Adrian Pearson Regional Affairs Correspondent? 0191 201 6286 ? adrian.pearson@ncjmedia.co.uk

TAXPAYERS could be hit with the cost of a failed bus network, transport operators have warned.

Bus firms have told Tyne & Wear councils they risk a "ticking timebomb" with their plans to take control of all services and fares.

Operators such as Stagecoach have opposed 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.

Stagecoach says recent analysis by transport consultant Chris Cheek shows the many risks which, if the services are council-controlled, would ultimately mean council tax bills being used to support any unsuccessful routes.

Mr Cheek, who has worked in the transport industry throughout his life, said one such risk comes from a promise by Nexus not to raise fares by more than inflation. With bus-driver wages lower in the North East than elsewhere, any attempt to lift salaries above inflation would slash profits from the routes.

Added to this, Mr Cheek says, is a concern that there is little Nexus could do to boost passenger numbers while opening itself up to various cost pressures. Repeating a legal threat already hinted at by the bus companies, Mr Cheek warns that the Quality Contract process without payment to existing operators would amount to nationalisation without compensation and see the two sides head to the European courts.

Last night Stagecoach 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 & 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. …

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