Struggling bus and Metro services in the North East are set to be handed a much-needed cash lifeline after a Government U-turn – but it may not be enough to stave off severe cuts.
Bailout grants that have covered public transport operators’ losses caused by low passenger numbers during the Covid pandemic were due to end in April, sparking fears of a major financial crisis that would lead to devastating cuts across the country.
But transport secretary Grant Shapps announced on Tuesday afternoon that the Government will now give more than £150m to bus and light rail operators in England, to help prop them up until October this year.
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Crucially, however, it is not yet known exactly how much of that money will be coming to the North East or what impact it will have.
It has been expected that the region’s three big bus companies, Stagecoach, Arriva and Go North East, will be slashing their mileage by up to 17% over the coming months due to the withdrawal of funding, with an initial set of cuts affecting more than 30 routes in Newcastle and North Tyneside confirmed last week.
With no details yet on where the latest grants are going, it is unclear whether any of those changes could now be abandoned or how further cutbacks due across the rest of the region later in the spring will be affected.
Gateshead Council leader Martin Gannon, chair of the North East Joint Transport Committee, said he feared the new funding was “a short-term sticking plaster that will not save us from cuts to the bus network either now or in the future”.
He added: “The funding will provide much-needed relief and some stability for transport operators up to October, but it arrives at the eleventh hour and some damaging bus service cuts have already been registered. It remains to be seen whether the bus companies will reverse them.
“I remain deeply concerned about the longer term. In this announcement the Government is clear that there will be no further Covid-related financial support after October. Bus passenger numbers are currently just above 70% of pre-Covid levels, and nobody expects them to have recovered fully by autumn. It therefore seems inevitable that public transport networks will shrink to fit.”
ChronicleLive has attempted to contact the North East Bus Operators Association.
Tyne and Wear Metro operator Nexus has also faced a significant funding gap and has needed to secure increased funding from councils to balance its books, which the local authorities may now seek to claw back.
Nexus’ director of finance and resources, John Fenwick, said Mr Shapps’ announcement was welcome but that local officials “need to understand how much Nexus, and the North East as a whole, will get” – with fears that an answer could take several weeks to arrive.
However, he warned: “Six months is not a long time in the context of our recovery and the pressure on our finances – and the whole industry – will probably still be there in the autumn even if it reduces as we rebuild our market.”
While the Metro itself was not scheduled for any service reductions this year, there have been warnings that it could happen in future without a significant shift in Nexus’ funding.
The Department for Transport said that the new cash would be dependent on local areas and coming up with “financially sustainable” post-pandemic plans and that details of funding allocations would be announced “in due course”.
Mr Shapps said: “The funding I’ve announced today will ensure millions of us can continue to use vital public transport services and brings the total we’ve provided to the sector to keep services running throughout the pandemic to over £2 billion.
“Not only that – as we look ahead and continue our work to overhaul services and build back better from the pandemic, this funding will also help authorities and operators work together to provide even better services for people right across the country.”
It comes after a new £200m deal was also struck for Transport for London last week.
