Reimbursement decision a ‘stay of execution’ in Cornwall

News stories are free to read. Click here for full access to all the features, articles and archive from only £8.99.
Far from reducing costs for the council, retendering will result in higher prices, argues Mark Howarth, MD of Western Greyhound
Far from reducing costs for the council, retendering will result in higher prices, argues Mark Howarth, MD of Western Greyhound

Mark Howarth criticises decision to re-tender bus services.

A recommendation to introduce an immediate reimbursement cut for concessionary fares has been overturned at a meeting of Cornwall Council’s cabinet.

 A back-dated cut in reimbursement to 43.9% had already earlier been overturned by Graeme Hicks, cabinet member for transportation, following outrage from bus operators.

Officers had subsequently proposed a cut from 73.5% to 50% to be introduced as soon as the four-month notice period to operators had expired. Following an investigation by Cornwall Council’s scrutiny committee, which heard evidence from bus operators, bus users including Travelwatch SW, community transport groups, and officers, the committee recommended the 73.5% reimbursement should not be changed during the current financial year. This was accepted by the cabinet and the 50% reimbursement will now only take effect in April 2012 on the same day as BSOG is reduced by 20%.

“We are delighted at this decision and it reflects the outrage of the public who now make 13m journeys a year by bus in Cornwall,” said Mark Howarth, Western Greyhound MD and CPT SW regional chairman. “However, it is only a stay of execution until April next year.”

The cabinet has also decided the entire network will be reviewed and re-tendered. Discussions will take place shortly with operators to establish which parts of the network are commercial and which will need to be tendered.

Council leader Alec Robertson admitted at the cabinet meeting that the council had been “slow off the mark” in addressing the £2.1m shortfall in the budget but said changes were necessary.

“Cornwall Council has been successful in building the bus network and I welcome the opportunity to review the whole network to ensure services continue to be provided where they are most needed,” he said. “The results of these tenders will go to cabinet in January and a view will be taken on how many routes can be funded.”

However, Howarth warned: “There appears to be a view that by going out to re-tender services can be bought back cheaper. In reality, exactly the opposite will happen as operators will cost into their tender prices the 30% reduction in concessionary fares, which makes up around half the business on most routes, the 20% reduction in BSOG and the failure of Cornwall Council this year to award the agreed inflationary increase, together with the current fuel price and other factors.

“Many vital commercial services, which currently do not cost money out of the public purse will be de-registered and will need to be bought back. In addition, many mid-life tenders were awarded when fuel prices were much lower than they are now and are at a very attractive price for the council, so Cornwall is not going to see best value out of this. This is a move by Cornwall Council to wrest control of the network out of the operators’ hands, and we all know taking control only comes at a cost.”

Cornwall Council will also be negotiating with operators on the detail of the 2012/13 concessionary fares scheme.

Howarth added: “There are aspects of the proposals we do not like such as the suggestion of a fixed pot scheme and there is no doubt that if operators are worse off, then Cornwall Council will be facing some operator appeals.”

The Council is also writing to Cornwall’s six MPs to request they make representations to central government to amend the English National Concessionary Travel Scheme in order to require concessionary pass-holders to pay a flat fare for each bus journey taken.

The news comes at the same time as a campaign is launched in Norfolk. See here