Bus services: 'Council may have to face up to higher fares'

Published on Monday 8 September 2008 10:14

IT will come as a relief to those who rely on public transport that an injection of £150,000 from the council will temporarily save some unprofitable bus routes from the axe.

But such is the financial plight in which Lothian Buses finds itself that the loss of some services seems inevitable and the council's subsidy will amount to little more than placing a sticking plaster over what is fast becoming a gaping wound.

It is to be expected that rocketing oil prices will hit anyone in the transport industry harder than most. After posting record profits of almost 6 million last year, it was clear from early on this year that the company would be hard pushed to come anywhere near to matching that.

As early as April fares rose to help offset a predicted 4.5m shortfall but as the price of fuel continued to rise to a level no-one could have foreseen, it rapidly became clear that this would not be enough to offset the company's spiralling costs. In an attempt to balance the books, Lothian Buses informed the council, which owns 90 per cent of the company, it planned to axe or reduce 16 unprofitable services. But this plan was rightly rejected, largely on social grounds, as many serve deprived areas where buses are the only means of travel for many.

The council was asked to come up with 300,000 to subsidise the unprofitable routes temporarily but today it is revealed that it is only willing to contribute half of that, effectively signing the death knell for the moment for some services.

The company has resisted the urge to seek a second fares rise but, given the unique circumstances, it not difficult to argue that a further increase is justified. Why should those who use the buses not pay a more economic rate for doing so? Considering OAPs and children travel free, would a few pence on a standard fare really make that much difference when motorists and others are paying through the nose?

It may be an unpalatable option but it is surely one that the council and the company may have to face up to in the near future once the subsidy runs out and other services may be at risk.

Like all consumers, the council itself is not sheltered from rising fuel costs. Today it says the hike in gas, electricity and fuel prices will cost it 10m more next year, but says it can make this up through energy efficiencies.

But as finances become tighter, paying for bus services through taxation, which is effectively what subsidies do, cannot go on if the means to raise the cash exists through higher charges for those who use the service.