Lothian Buses could be sold to pay for Edinburgh Trams

Published on Thursday 28 July 2011 14:39

UNION leaders have issued a "hands off" warning amid fears Lothian Buses could be sold to help tram bosses plug a £170 million funding gap.

The Unite union fears selling the bus company or borrowing against its profits could be among the options put before councillors as officials look to find the necessary funds to build the project to St Andrew Square.

The union, which represents those who work for the council-owned bus company, has written to councillors urging them to vote against any proposals that would see the bus company fall into private hands or be saddled with debts from the tram project.

Rab Fraser, chairman of the Lothian Buses branch of Unite, said: "After the last council meeting our concern is where the money is coming from.

"Our position is clear - Lothian Buses must not be sold off to pay for the trams, our profits should not be squeezed to plug the funding gap, and the business must remain in the ownership of the people.

"Compromising Lothian Buses will only lead to increased fares and reduced services."

Council officials have spent the summer recess meeting with the Scottish Government over how they can find the money to complete the tram line as far as the city centre.

Industry experts believe around 150-200m could be raised from the sell-off of the bus company, but the council has previously ruled out any prospect of a sale.

The current budget for the tram project is 545m, but the council has already made arrangements to borrow an extra 55m.

Leaked figures ahead of a council report last month showed building to St Andrew Square would cost 773m - leaving a shortfall of more than 170m.

Councillor Andrew Burns, leader of the Labour group, said any proposal that would directly affect Lothian Buses would be "totally unacceptable". He said: "Lothian Buses is a publicly-owned company and will remain so. There's no prospect of our group supporting any sale of the company.

"We felt opening the line to Haymarket could be done within the existing budget.

"We were not prepared to support the option of going to St Andrew Square because it's going to require extra money."

It was initially hoped officials would be able to report back to councillors in August with ways of raising the money.

However, that now looks increasingly unlikely, with the council dependent on the Scottish Government to approve new ways of borrowing cash.

Councillor Gordon Mackenzie, the city's transport convener, said: "We've said in the past that there's no way we're going to sell off Lothian Buses."