The Tyne and Wear Passenger Transport Authority has today (8 February) unanimously approved a budget for the 2006-07 financial year.
 
The budget voted through approves recommendations made by Nexus for cuts in services and the one-off use of financial reserves to meet a funding gap from Government of £5.4m, relating to the cost of introducing free local bus travel for pensioners and the disabled (CT) from 1 April.
 
PTA members had asked that recommendations be drawn up that will minimise the impact of cuts on the authority’s programme of reducing social inclusion by providing public transport to those who need it most.
 
Members of the PTA used the meeting to express their anger and frustration at the Government’s failure to provide sufficient funds to meet the higher cost of CT in Tyne and Wear, which has one of the highest number of pensioners dependent on public transport in the country.
 
PTA Chairman Councillor David Wood said while there was still some small hope of gaining further financial support from Government the Authority had no choice but to set a balanced budget at this stage.
 
He said that if any further funding could be secured it would go towards reversing at least some of the cuts agreed at the meeting.
 
PTA Vice-Chairman Councillor Joe Lawson added: “I am angry, frustrated and disappointed. The idea of free concessionary travel is an honourable one, but in its execution we have been left with a deficit which means some other areas of the country must have more than enough – and that is grossly unfair.”
 
Mike Parker, Director General of Nexus, said: "These cuts represent real pain, but we have tried to reduce the impact on the most vulnerable as much as possible."
 
“Now a decision has been made we will concentrate on communicating the changes to customers."
 
"We are still exploring every possible route to secure extra funds, or find other ways of supporting Teen Travel and other initiatives."
 
The impact of the budget on services will be: 

£2m be taken from financial reserves. This can only be done once, for the 2006/7 budget. It is likely therefore that a further £2m of budget cuts will be required in the 2007/8 budget, beyond those recommended here.
 
£1.8m to be saved through the total withdrawal of the Teen TravelTicket after July 31. This will have an impact on about 10,000 pass holders in further education aged 16-18 who currently make an estimated five million journeys a year. As an example a student purchasing a four-weekly all zone ticket at £31.50 would have to pay £61.50. Councillors have agreed to keep the scheme in operation until the end of the current academic year, through the use of £500,000 of PTA reserves
 
£0.8m to be saved from raising the Child Concessionary Fare from 30p to 40p from April. This will have an impact on 57,000 pass holders who currently make an estimated eight million journeys a year. It will also have an impact on local education authorities who purchase 3,500 passes every year. This is a 33% increase in cost, compared to a 24% increase in average adult bus fares over the period since the last increase.
 
£0.3m to be saved from a 12% reduction in the budget supporting the secured bus network. Nexus has begun work to assess the impact on services, with the aim of reducing the impact on social inclusion programmes as far as possible which is expected to take up to one month to complete. At this stage it is not possible to identify individual services that will be affected, although all current scholars’ bus services are protected. Service cuts will come into effect from May onwards
 
£0.3m from savings within the administration of Nexus.
 
£0.2m from moving the 9am start time for concessionary travel back to 9.30am Monday to Friday, from April 1. This will impact on about 300,000 journeys every year, including those by current all-day disabled pass holders.
 
The PTA agreed the benefits of the new concessionary fare scheme for pensioners and the disabled be extended to the Tyne and Wear Metro system and rail service between Sunderland and Newcastle.
 
This will be done by introducing a new CT Gold Card, at a cost of £8 per annum for those who wish to take advantage of concessionary travel on these modes.
 
This would take the form of an annual pass to be purchased by those entitled to concessionary travel, who would then be entitled to travel on Metro and the rail service between Sunderland and Newcastle for no further charge. Those pensioners and disabled without the card will pay full fare.
 
The PTA has been forced to make cuts because while CT for pensioners and the disabled is mandatory local schemes such as TeenTravel are not protected in the same way.
 
The additional cost of implementing CT is estimated to be around £20m. £12.9m was added to the district councils’ base Revenue Support Grant settlement from Government in respect of CT, leaving a funding gap of £7.1m.
 
Following discussions with the Department of Transport a sum of £1.7m has further been secured in acknowledgement of the likely impact on Metro of CT on buses – either through the lost patronage and revenue on Metro and consequent increased travel on bus, or through the direct impact of offering free travel on Metro.
 
This left a funding gap of £5.4m, which the PTA had no choice but to cover through cuts in services.
 
The total levy by the PTA to local authorities is £65,057,000, of which £61,048,000 is a revenue grant for Nexus. This represent a reduction of £491,000 in the PTA budget and an increase of £14,614,000 in the Nexus grant, most of which is accounted for by the cost of CT, and paid from the Revenue Support Grant.
 

Date 8 February 2006
For more information contact Iris Boyd telephone (0191) 211 5071
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