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Friday, 28 January 2011

A search for optimism

Something of a busy week as you might imagine and Thursday night was the annual Confederation of Passenger Transport dinner.

Guest of honour was Norman Baker, Parliamentary Under Secretary of State for Transport who admitted to having gone rather pale when earlier his officers had told him there had been a reshuffle. Of course it wasn't a Ministerial reshuffle but the appointment of Giles Fearnley as our Managing Director Bus at First.

But the shuffle is rather more extensive since Giles has been Chairman of CPT - a post he has had to relinquish. And so at our CPT Council meeting yesterday morning we hurriedly persuaded outgoing President Steve Whiteway of Epsom Coaches to stay on another year and incoming President Ian Morgan of Trent Barton to become Chairman instead. Thus Ian made his planned speech at last night's dinner in a capacity he hadn't expected 24 hours earlier.

Ian made some very strong points to the Minister as the industry faces a 'perfect storm' of regulatory shock and serious reductions in funding.

He reminded the Minister that we are attempting to run our businesses whilst waiting for the forthcoming outcomes of the Competition Commission Inquiry. We are also running them into the new financial year when revised arrangements are coming into force for the carriage of concessionary pass holders. The Government had produced new guidance which the local authorities can follow or not as they choose. Responsibility therefore falls on those authorities all of whom are receiving significantly smaller grants from Government. This will lead to lower levels of compensation for concessionary pass holders as well as significant reductions on tendered bus services, school transport and other areas.

Peter Shipp, Chairman of East Yorkshire Motor Services Group, has already stated clearly and publicly, that the reductions in funding his companies will suffer exceeds their normal annual profit.

Service cuts are inevitable. Some local authorities are already talking about no supported services at all. And for service cuts to be effective from the start of the new financial year the deregistrations will have to be with the Traffic Commissioners by 4th February - that's next week. However, not all operators can do this either as very many local authorities have yet to agree with operators the levels of funding and the appeal mechanism can run on for many months. There is, therefore, considerable levels of uncertainty.

More than one pundit has observed that whilst the Coalition Government may keep its promise to retain the free pass for entitled people, there may, for many people in rural areas, well be no bus services on which to use them.

The Minister recognises these challenges and in his response he reminded us that all areas of society are suffering cutbacks as the Government seeks to reduce the deficit. And indeed the bus industry is well known for its resourcefulness and resilience. How it deals with all this will make 2011 a very interesting year indeed.


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