Proposals to increase the amount of money being paid to bus operators who transport Cumbria's school children, vulnerable adults and other bus users around the county are to be considered by Cabinet next month (September 1).
The proposal is to increase the contract payments to bus operators who tendered for their contracts before April 1 2008 by 1.5% from September 1. The increase has been recommended to reflect the soaring price of fuel, which some bus operators have warned is making their businesses unviable and could force them to hand back their contracts.
The recommendation to Cabinet is a result of an ongoing dialogue between the county council and the North Cumbria Coach Operators Association (NCCOA) on the best way to resolve the situation. NCCOA have argued that the existing inflationary index used by the county council, the Retail Price Index (RPI), did not truly reflect their rising costs.
The cost of the 1.5% increased payment to bus operators will be £30,350 per month (£212,450 for the remainder of the current financial year) and will be on top of an extra £138,075 needed to fund unpredicted inflationary rises on the cost of running the contracts (the predicted RPI rise in the council's 2008/9 budget was 3.3% but the current RPI rise stands at 4.8%).
Cllr Jim Buchanan, Cumbria County Council's cabinet member responsible for transport, said:
"Everyone is feeling the squeeze from inflation and high fuel costs, but we've come up with the best compromise. It throws a much-needed lifeline to bus operators while at the same time minimises the pressure on our own budget. We've looked closely at the cost implications of bus operators walking away from their contracts and the disruption this would cause to people who rely on our buses. Further negotiations will also be taking place to address this issue in the medium to longer term.
"This is a national issue and councils all over the country are finding themselves in similar situations. The county council is urging Government to provide a relief package for bus operators in rural areas by pouring some of the extra revenue it is getting from increased fuel duties back into service provision. In 2003/4 Cumbria County Council received just under £400,000 through the government's Rural Bus Challenge and Urban Bus Challenge schemes, however these schemes were reduced to £106,000 funding in 2007/8 and have now been removed all together. Reintroducing these schemes should be a priority for Government. Another measure which would provide considerable relief to operators would be for the Government to extend the fuel duty rebates that bus operators receive so that they cover home to school transport as well as normal public buses."
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