Member Article

North East reacts to NECA losing bus regulation bid

Following Stagecoach’s response to the decision by the Quality Contract Scheme Board to reject The North East Combined Authority’s (NECA) proposed control over local bus services, we bring you further reaction from across the region.

Nexus, the transport executive of NECA, had proposed that bus services should be franchised in Tyne and Wear through the letting of contracts, with local taxpayers assuming the risk of the local bus network. This approach would have replaced the current system where services are largely commercially funded by bus operators.

The proposal met strong opposition from heavyweight bus operators in the region, Stagecoach, Go North East and Arriva, and this morning’s decision went in favour of the bus operators.

Reaction

Tobyn Hughes, Managing Director of Nexus, said:

“We are extremely disappointed. We want to introduce a simple, affordable and integrated public transport system in this area, and the Board recognises our proposal could achieve this. It should not be this difficult.

“The Board’s opinion is that we should not go ahead largely because we are not providing compensation to bus companies for profits they may lose in the future, and the Board has taken a negative view of our proposal as a result.

“We simply disagree with many of the Board’s conclusions, and we will be discussing next steps with the North East Combined Authority.”

Kevin Carr, Managing Director of Go North East, said:

“The report, which follows the formal board hearing in July at which Nexus’ plans were independently scrutinised, confirms our belief that the proposed scheme for Tyne and Wear would not be good value for money for bus passengers or council tax payers when compared to the partnership proposal.

“Go North East has always believed that it already provides good quality, value for money services that meet customer’s needs at no risk to the tax payer. This is supported by one of the highest passenger satisfaction ratings in the UK, of 90%, by the governments own independent watchdog Transport Focus.

“Collaboration and partnership working are particular strengths for Go North East and we believe that this approach provides the best foundations for a good public transport network. We will therefore continue to work with our key strategic partners, including the North East Combined Authority, to continually improve services for our customers and the north east economy”

Richard Collins, lawyer at national law firm Bond Dickinson LLP, said:

“There were valid arguments on both sides of the QCS debate about the best way to ensure the future of good quality public transport in Tyne & Wear and about the commercial positions of the bus operators and Nexus’ own funding requirements.

“The operators have won this battle but the long drawn-out process has made it clear that the current regulatory system needs to change. This looks likely to happen sooner rather than later, with new legislation on the horizon such as the Buses Bill, which may introduce franchising and give greater emphasis and encouragement to partnerships between operators and local authorities.

“Against the background of the drive towards a Northern Powerhouse, which implies devolution of power to local authorities, more challenges to bus operators may be around the corner as local authorities take more control over regional infrastructure and services. That creates opportunities too - and may in turn motivate operators to think seriously about introducing and enhancing partnership arrangements with local authorities in advance of having their hands forced.”

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