The North East ‘Declares War’ on Bus Companies

Jonny Morrison, BA Chinese (Modern and Classical)

The North East Combined Authority’s (NECA) attempts to gain control of bus routes in the region “represents a declaration of war … on the bus companies”, according to Sunderland Conservative opposition leader, Peter Wood.

The NECA is the strategic authority formed last year by the councils of Durham, Gateshead, Newcastle upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland in an attempt to fill the gap left by the loss of the One NorthEast regional development agency, which was axed by the current government against election promises. NECA has submitted plans to introduce a Quality Contract Scheme (QCS) for all bus routes in the area, similar to that in Greater London, under legislation introduced by Labour in 2000.

Under such a scheme, the combined authority would be responsible for bus routes, frequency, fares and ticket types, the quality of the service, and would also be responsible if things go wrong. Transport for London does exactly that – the bus routes are put out to tender at a certain price per mile, which is guaranteed until the contract is put out to tender again.

Councillors in the North East argue that companies such as Stagecoach are making too much profit from what is a vital public service, but still refuse to run many routes, cutting off communities. One in ten bus routes in the region are currently subsidised, with the cost to Newcastle City Council alone being £55.2 million last year. This subsidy has been called into question in light of the city’s budget being cut by the central government by over a third, over three years. NECA predicts without a QCS, cuts will mean the end to all 255 school bus services, over 200 other bus services, the shields ferry and the gold card (reduced cost scheme for the Metro for pensioners).

However, Stagecoach chairman Sir Brian Souter has said that he would rather “drink poison” than work within a council-controlled transport network, calling the NECA a “bunch of unreconstructed Stalinists”, despite operating at a profit margin of 9.4% under the system in London. Labour’s Wearside MP, Bridget Phillip said, “Mr Souter’s sole concern is to defend his inflated profit margins in the region,” which are currently around 14.6%, with 80% of the bus companies’ profits leaving the region as payments to shareholders, rather than being reinvested in the local network.

A spokesperson from Nexus, the North East’s passenger transport executive, said that: “Local people who make 140 million journeys every year will benefit from simple fares, cheaper tickets for young people, universal smartcard travel, a single source for customer services, a greater say in how routes are planned and improvements in journey quality.”

The proposals are currently being considered by the QCS board, headed by Kevin Rooney, the North East transport commissioner.