Nexus studies responses to bus Quality Contract consultation

UPDATE Wednesday 4th December, 12.00: Newcastle City Council contested LTT's introductory paragraph to this story, specifically the statement that the council had given the QCS proposals a "distinctly lukewarm reception". In a letter to LTT, council leader Nick Forbes says this was "inaccurate and misleading", adding:  "On the contrary, the city council fully supports the Quality Contract Scheme in its ambition to arrest the decline in bus patronage, grow accessibility and deliver better value for public money." I accept the phrase used in LTT's original coverage was our interpretation and could be open to challenge. The original opening paragraph has therefore been removed. The opening sentence of the fifth paragraph has been amended to explain that Newcastle's consultation response expresses no clear preference between the QCS and Voluntary Partnership Agreement (it previously said Newcastle had not given a clear endorsement of the QCS, which I accept could have been intrepreted as suggesting Newcastle was against the QCS; the headline to the story has been changed for the same reason). LTT editor Andrew Forster.

Consultation on Nexus's bus Quality Contract Scheme proposal closed last week. As expected, bus operators have threatened legal action against the plan and Stagecoach has raised the stakes by suggesting action could be taken against individual members of the Tyne and Wear Integrated Transport Authority.

Unite, the main trade union for bus employees in Tyne and Wear, has offered support for the QCS but warned that it could thwart the plan if it doesn’t deliver a good deal for members. 

Durham County Council, which borders Tyne and Wear, has also raised concerns about the plans. It says the operators’ preference for a Voluntary Partnership Agreement could be a less risky way to proceed. Operators submitted their revised VPA proposals to Nexus last week.

Newcastle City Council’s views are set out in a letter from council leader Nick Forbes to ITA chairman Dave Wood, who is also a Newcastle city councillor.  Both are also Labour politicians.

The council expresses no clear preference between the QCS and the Voluntary Partnership Agreement. “The Quality Contract Scheme does appear to be a way to deliver the ITA’s bus strategy vision, and Newcastle Council would want to support that option if it does not prove possible to deliver equivalent benefits from an improved Voluntary Partnership Agreement," says Forbes.  

Forbes says he looks forward to the “further development of the feasible options” that will help deliver the council’s public transport objectives. He reminds Wood that the North East Combined Authority of seven council leaders (the five Met districts plus Northumberland and Durham) is likely to take over the governance of transport from the ITA from next April. A final decision to make the QCS would not have been made by then. 

Forbes adds that Newcastle is unable to commit to the financial assumptions contained in the QCS plan. Nexus assumed that the levy paid by the districts to the ITA would remain frozen for four years but then rise in line with RPI. 

Forbes says: “The most that we are likely to be able to agree to at this stage is to keep the level of the levy under review, taking into account available funding. This reinforces the importance of securing an approach [to buses] which doesn’t put additional strain on scarce revenue budgets at a time when Government cuts to local council budgets look set to continue.”

Of the other metropolitan districts, Gateshead Council has given a more enthusiastic response to the QCS (LTT 15 Nov) but LTT was this week unable to obtain the views of Sunderland, North Tyneside or South Tyneside. 

The Unite trade union has  offered support for the QCS “if it is done right”. It says the plans must harmonise terms and conditions up to the best on offer in Tyne and Wear, specifically including a minimum wage rate of £10.30 an hour and better pension provision. 

“Unite wants to engage in the QC process but only if the conditions are right for our members,” said North East Unite officer Fazia Hussain-Brown. “The future success of QCs depends heavily on winning over Unite members. If Tyne and Wear Integrated Transport Authority and Nexus cannot get Unite members’ buy-in then QCs will not work.”

Durham County Council has given a lukewarm response to the plans. “We have concerns about the on-going viability of depots, outstations and non-QCS local services where these may be undermined by a loss of competition or a skewing of market conditions following the introduction of the QCS,” Durham’s head of contract services, Adrian White, has told Nexus director general Bernard Garner.  

White welcomes Nexus’s proposal for a cross-boundary collaboration agreement to “counterbalance” these effects and says early work on this appears “promising” though there “remain some concerns”.

He says he understands why Nexus and the Met districts are attracted to a QCS, “not least in the potential financial windfall that would come from taking control of the commercial bus market”. 

But he warns of possible lengthy legal challenges from operators and says Durham therefore supports ongoing discussions of partnership working. A partnership “could deliver significant and immediate benefits that could be widened out to cover the LA7 footprint (the five mets, Durham and Northumberland) as part of the emerging plans for a Combined Authority,” says White.

He says Durham has considered implementing a bus QC itself but the area’s bus network does not have the level of profitability to make it attractive. “However, should the Tyne and Wear scheme prove successful we would be interested in discussing how a future expansion of the QCS could cover County Durham.”

Passenger Focus is not taking sides in the QCS versus Voluntary Partnership Agreement debate. “There is much in the QC proposal that aligns well with passenger aspirations,” it says. “However, given the sensitivities surrounding this issue we would re-iterate the comment we made in the opening paragraphs that this should not be used to make or infer any comments on the pros or cons of alternative models – the details of which we have not seen.”