Newcastle Chronicle 3rd November 2015  “A pioneering attempt to bring buses back into public control in the North East has suffered a major blow. And a report which said the plans were unworkable could have huge implications for Chancellor George Osborne’s Northern Powerhouse scheme.

Last year, the North East Combined Authority – made up of the region’s seven local authorities including Sunderland City Council and South Tyneside Council – launched a bid for a London-style Quality Contract Scheme. It claimed it could generate a £272m economic boost to the region over the next decade. Metro operator Nexus, which was behind the plans, said the changes would have lead to reduced fares, better services and a reduction and freezing of the subsidies that now go to the private bus companies.  But operators Stagecoach, Go-Ahead and Arriva, which run about 90% of bus services in Tyne and Wear, claimed the move would mean higher fares, worse services and higher taxes.

After a series of hearings this year, the Quality Contract Scheme board chaired by the traffic commissioner for the North East, Kevin Rooney, rejected the report saying it failed to meet three of five public interest test criterion. It accepted it would improve the quality of service and help towards the implementation of local transport policies.But it said it did not represent value for money, can’t demonstrate it would increase bus use, and imposed disproportionate adverse effect on bus operators. As part of it decision, the commission said: “The proposals generate negative cash impacts on the three existing operators in the range of at least £85m to £226m.

This has led to alarm bills ringing over the Northern Powerhouse scheme. Nick Forbes, leader of Newcastle City Council and transport lead for the North East Combined Authority said: “Every devolution deal signed by Government has built into it some aspect of bus regulation, a situation which risks being undermined as a result of this decision. The Government must urgently set out how its soon to be published Bus Bill will address this threat to devolution, or see one of the most important part of George Osborne’s Northern Powerhouse kicked out before it even gets started.”

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