Bus companies warn of 'ticket to higher taxes' over transport vision for Northumberland

North of Tyne mayor Jamie Driscoll and Newcastle City Council leader Nick Forbes have both stated that they want the government to grant them the powers to create a London-style bus system in which they have control over routes and fare prices, rather than private companies.

One of Boris Johnson’s first pledges as Prime Minister was that bus franchising powers will be extended to any part of the country that asks for them – potentially paving the way for the North East to revive its ambitions.

But the region’s bus operators have hit back by saying that such a project, a version of which was scrapped in 2015 when it was deemed to not represent value for money, would create a financial black hole that would need to be filled by taxpayers’ money.

A spokeswoman for Stagecoach said that bus franchising is “a one way ticket to higher taxes for local people and will not solve the key practical challenges needed to improve bus services and air quality, such as car congestion”.

They added: “In London – currently the only UK city to have a bus franchising system – passenger decline is faster than anywhere else in the country, routes are being cut and the bus network is £700m in the red.

“We don’t believe taxpayers in the North East would want a system that would see their council tax bills rise to plug a similar huge black hole. In fact, the only fully worked-up franchising proposal in the UK so far came in the North East a few years ago and was deemed not to be financially viable by an independent panel. A partnership approach between bus operators and the public sector offers the best and most cost effective route to deliver a transport system fit for a growing and inclusive 21st century city-region.”

In 2015 plans to give Metro operator Nexus legal powers over bus services in Tyne and Wear were shelved after a panel set up to consider the ‘Quality Contract Scheme’ found it would not represent value for money, could not demonstrate it would increase bus use, and would have a disproportionate adverse effect on bus companies.

Mr Driscoll said last week that the plans were “the right thing to do then and the right thing to do now,” as he announced that he would be pressing the Prime Minister to deliver on his devolution promise for the North of Tyne Combined Authority.

But Martijn Gilbert, managing director at Go North East, believes that a new move for bus regulation would be a “huge distraction” from “more pressing” public transport issues.

He said: “There is also huge cost to the taxpayer in the type of bus operation being suggested, shifting the financial risk to them and depleting budgets to invest in other areas, as the previous Quality Contract proposal found when assessed against the public interests tests and as we also see in London with a bus network requiring £722m in subsidies in the last financial year alone.

“We encourage all parties to work together and focus on the real issues of the day. Regulatory structures provide no solution and franchising could provide a huge distraction from tackling barriers to growing bus use, reducing congestion and tackling air quality in the region.”

Coun Forbes said in June that the North East’s bus providers are “failing the travelling public” and that public control was needed to bring down fare prices and protect less profitable services from closure.