Go North East questions benefits of proposed Quality Contracts Scheme

The north-east’s largest bus operator, Go North East (GNE), has questioned the ‘evaporating’ benefits of the proposed Quality Contracts Scheme (QCS) being scrutinised by councillors who vote on it, on 21 October.

Since the scheme was proposed last year the claimed benefits have already fallen by 40m and a promise of 18 extra buses has been ‘airbrushed out’, according to GNE MD Kevin Carr.

He says: “We’ve always believed that the risks and uncertainties of this unproven proposal were underestimated, and the benefits would evaporate as reality set in.

“Just one year on the claimed savings are being scaled back, and the extra buses airbrushed out. Overall, this has effectively taken 40m of benefits out of the proposed scheme.”

The scheme as first presented in July 2013 promised savings of 7m a year, 18 extra buses, and that a contingency fund of 78m would be adequate.

In the revised scheme now being considered by the North East Combined Authority, the annual savings have shrunk from 7m to 5m, the 18 extra buses have been scrapped and the contingency fund has increased to 80m.

Says Mr Carr: “Benefits for passengers have been revised downwards, too. The claim for fares reductions, described last year as being as much as 2.5%, now appear to be around 1%, but in reality all fares under the scheme would rise by at least 10p a year – far more than recent bus fare rises for most people.”

A central government review of Bus Service Operators’ Grant (BSOG) could further undermine the viability of the scheme, according to Mr Carr: “The QCS has ignored this potential risk of a further 100m ‘hole’ in the scheme.

“The scheme is only feasible if the five local authorities in Tyne and Wear can commit to funding it at 51.2m a year, as well as underwriting the potential loss of BSOG of up to 10.1m annually.

“Despite Nexus’ claims, the QCS creates new risks for our cash-strapped local councils, with no certainty of protecting Tyne and Wear’s bus system.”