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Bus services update and motion on concessionary fares

At the Full Council meeting of 23 September, a motion was proposed as follows:

"Cornwall Council recognises the very difficult financial situation faced by all bus operators in Cornwall and the threat that this poses to the retention of a rural bus network suitable for our residents. The Council's own budgetary constraints mean that we cannot put more money into the subsidy of routes. However, we recognise that a large proportion of concessionary pass holders would be willing to make a contribution towards their fares and would much prefer to pay something rather than to lose services all together.

The Council is deeply disappointed that central government has not allowed councils such as Cornwall Council to use their local knowledge of rural services to trial a system of allowing bus operators to collect a contribution towards fares from concessionary pass holders. Cornwall Council strongly urges the government to rethink its currently intransigent position and the Council affirms its support for bus operators who may challenge the government on this issue."

The motion has been referred to the Transport and Waste Portfolio Advisory Committee for further consideration. Below is the statement that I had circulated to all members to explain the background to the motion.

Overall, the bus network that we have in Cornwall is pretty good for a rural council. However, the financial situation suggests that it is very unlikely that this network will be maintained over the next year or two.

The two largest operators are First and Western Greyhound. Between them, they provide the bulk of the day-to-day timetabled services in Cornwall. Both companies are losing money on their services. This is not a commercial secret - the accounts of both companies are in the public domain on the Companies House website. The problems that have been experienced on some Western Greyhound services over the summer are symptomatic of an operation being run in tight financial circumstances.

There is no light at the end of the tunnel that suggests that their finances will improve in the near future. At any time, one or both of these companies could decide that they do not want to carry on running bus services at a loss in Cornwall. They could either cease services in Cornwall completely or drastically reduce services to a small core network from which they could operate at a small profit. If that were to happen, it is very unlikely that other operators would jump in to fill the gaps other than for a few routes that might fit into that operator's current network. There is, therefore, a strong likelihood that a significant number of rural settlements will be left without a bus service.

In order to maintain a good rural public transport network in Cornwall, it is essential that a way is found to improve the finances of the operators running those services. Standard fares are already at such a level that any further increases would be counter productive and would not increase gross revenues because of the impact on passenger numbers. Cornwall Council's budgets are such that we are unable to pump any more money into the bus operators through a more generous concessionary fare rebate percentage or through increasing the budget available for the subsidised routes. There is, however, one potential income stream that, if it were tapped, would significantly improve the finances of the operators. Concessionary pass holders currently travel for free between 9.30 a.m. and 11 p.m. Surveys carried out of these pass holders show that a large majority of these users would be happy to pay something towards their fares - they don't want to lose the benefit of the concessionary pass entirely, but they would be happy to make a contribution. If, for example, all pass holders had to pay £1 per journey, and, at the same time, CC continued to provide the current level of concessionary fare rebate to the operators, the bus companies would receive an additional £5 million of income per annum. This would transform their finances and would enable them to maintain, maybe even to expand, rural services.

Unfortunately, the government has expressly forbidden bus operators to make any charge to pass holders (although there are limited loopholes for some services). Representations have been made by CC and by the Cornish MPs to allow Cornwall to carry out a pilot of charging, but the government has been intransigent.

We could, therefore, soon be in the bizarre situation of some rural areas being without a bus service; the concessionary pass holders in those areas would have passes that entitled them to free transport, but have no services on which they could use their passes. If that does happen, we need to be clear where responsibility for that situation lies: it will be with central government, not with First or Western Greyhound, nor with Cornwall Council.

The time has come to stop just asking government politely and to try to find a way of putting more pressure on them to allow operators to do what is common sense.

If one or more of the operators were to try something innovative in order to challenge the government, then we should be backing them. At a time when all the Westminster parties have offered Scotland virtually whatever powers they want, surely Cornwall should at least be allowed to set its own bus fares!


September 2014

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