Go North East responds to Quality Contract Scheme proposal

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Operator claims if revenue of cost calculations are even 1% out it could have disastrous consequences

Go North East has expressed serious concerns about the risks and costs built into Tyne and Wear’s proposed bus Quality Contracts Scheme and recommended partnership working as a quicker and more effective way of improving bus services in the region.

In its formal consultation response, Go North East highlighted ‘multiple flaws in the scheme,’ which it claims if implemented would be the first experiment of its kind in the UK and would transfer the financial risks and costs of operating services to local taxpayers.

The operator claimed the flaws include:

  • Higher risk – with local councils exposed to the danger of falling revenue,  deepening a deficit which has to be met by local taxpayers;
  • Higher costs for fare payers and taxpayers – with the contracting system itself creating a new layer of costly bureaucracy which is not needed either under the current system or under the partnership proposal; and
  • Inflexibility – Nexus setting up long term contracts which eliminate competition for up to 10 years at a time, and which make it impossible to respond quickly to new public requirements for new routes or new bus technology.

Go North East Managing Director Kevin Carr said: “Nexus’ calculations of bus revenue under the QCS need only be 1% lower than forecast for the scheme to be unaffordable to the tune of £11m.

“Costs need only be 1% higher than forecast for the funding shortfall to be another £13.3 million.”

In contrast, Go North East said the partnership proposal from the North East Bus Operators’ Association (NEBOA), of which Go North East is a member, would provide real benefits. These include:

  • A new Bus2Bus ticket enabling passengers to interchange between operators;
  • A new discount ticket for 16-18 year olds; and
  • District partnership boards giving local communities a direct say in changes to services.

Kevin added: “Independent surveys show that bus passengers inTyneand Wear are the most satisfied of any UK Metropolitan area. Go North East has spent 26 years responding to what customers want – routes direct to city centres, fares which suit all needs, and branded modern buses.

“The Nexus scheme will freeze progress for up to 10 years, increase fares for bus passengers in some areas by over 20% and expose local taxpayers to the risk of fare revenue not meeting the cost of the scheme. The partnership proposal offers the service improvements that passengers want, without unnecessary delay, and will give Nexus the benefit substantial cost savings. It’s a far superior option for the people of Tyne & Wear.”

Tobyn Hughes, Deputy Director General of Nexus, said: “We are in the middle of reading the detailed submission Go North East has made as we seek the best way to protect and improve local bus services.

“We shall be carefully considering and evaluating all consultation responses and the supporting data provided to substantiate those responses with our own independent experts. We will only proceed with a Quality Contract Scheme if after the most careful analysis we remain convinced that it makes sense to do so.

“It is understandable a company like Go North East will be opposed to a Quality Contract Scheme as it is clearly adverse to their commercial interests and it is important to understand their position fully when assessing the merits of the scheme. It is for that reason a scheme should only be introduced if it is clear it will be to the greater good of the public in theTyneand Wear region to do so.

“We have always been clear we are open to partnership with existing companies instead of new contracts if that is the best way forward and we continue to engage actively with the bus companies to see whether a viable alternative can be developed.”