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CATASTROPHIC: Public transport cuts risk ‘economic collapse’

CATASTROPHIC: Public transport cuts risk ‘economic collapse’

Gateshead Council leader Martin Gannon next to the Leamside Line., Image: NCJ Media

Swingeing cuts to public transport services would be “catastrophic” and risk causing “economic collapse in the North East of England”, a council leader has warned.

Plans to slash millions of pounds from vital routes across Tyne and Wear have emerged this week, as Tyne and Wear Metro operator Nexus faces up to a £20.8m black hole.

Government bailout payments that have covered the Metro’s massive losses while passenger numbers have dropped during the Covid pandemic will end from next April, leaving a major cash shortfall as ridership is not expected to jump back to normal levels by then.

In response, Nexus is proposing to cull £7m from funding to the region’s bus operators and could be forced to make a further £4m of cuts unless five local councils can find money in their own coffers to cover that sum.

The Metro itself appears unlikely to be targeted for service reductions to save money, on the basis that the resulting drop in ticket income would spark an even worse cycle of decline which would ultimately force a complete shutdown of the network.

But the Shields Ferry and vital bus services, including routes to rural communities, could come under threat.

Gateshead Council leader Martin Gannon said that the “straightforward” solution was for the government to perform a U-turn and commit to propping up Nexus until passenger numbers return to normal.

He told the North East Joint Transport Committee on Tuesday: “The government needs to come up with this. I understand the huge pressure they are under and the unprecedented support that has had to be given out during Covid.

“But it is not over and it is having a catastrophic impact on our income on both Metro and bus services.

“The alternative here would be economically catastrophic and it would run completely counter to what is required from government policy and ours in dealing with climate change and air quality – it would be damaging that irrevocably.”

The Labour leader, who chairs the JTC, added: “It is better for them and better for us that we do not have economic collapse in the North East of England.”

The severe threat to bus routes comes just weeks after the launch of an £800m vision was launched to improve North East services with faster journey times and cheaper tickets.

Nexus’ current budget proposals, which will be subject to a final decision in January, are to:

  • Cut £7.5m from a budget used to reimburse bus companies for carrying passengers with free bus passes. Nexus warned that this “represents a major source of income for local bus operators and its reduction will increase pressure on bus companies’ finances”, meaning some routes could be left with reduced bus frequencies or hours;
  • Find “efficiency savings” of £2.4m and attract more Metro passengers to increase Nexus’ yearly income by £1.2m;
  • Spend £5.6m of Nexus’ reserves, a solution that has been called “not sustainable” beyond next year;
  • Ask Newcastle, Gateshead, Sunderland, North Tyneside and South Tyneside councils to increase their levy payment to Nexus by £4.125m – or cut Metro, Shields Ferry, or Nexus’ bus services to save the same amount.

Nexus pays for bus operators to run ‘secured’ services that would not otherwise be commercially viable but are essential to the region’s transport network, including early morning or late night services and routes to outlying areas.

Newcastle City Council leader Nick Forbes said that council faced with “unpalatable choices” without a government U-turn and would risk “reducing buses to the point at which there is no point having buses at all”.

He added that, for councils that have already shaved hundreds of millions of pounds from their budgets over the last decade, being forced to find emergency funds to prop up Tyne and Wear’s transport network could be “the straw on the camel’s back which I fear will break us”.

The Department for Transport, which has already given £47m to the Metro since the onset of the pandemic, said this week that it would “continue to work with Nexus to understand the needs of the local community”.

 

Words: Daniel Holland, Local Democracy Reporter


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