Bus passengers face 10p rise

BUS passengers could be hit with a 10p fare hike from next month, it emerged today.

The Evening News has learned Lothian Buses chiefs are considering the move to fill a massive financial black hole, which could also lead to service cutbacks in the evenings and on Sundays.

The council-owned company today insisted no rise had yet been agreed, but insiders admitted a fare hike was "highly likely".

It comes after the Scottish Government froze a rebate to transport operators used to cover rises in fuel duty, while there is also anger at the "inadequate" level of compensation to cover the cost of free travel for pensioners.

As a result, Lothian Buses is understood to be facing a possible £4 million shortfall in the coming year. Other bus operators across Scotland, including Lothian's main rival First, are also considering what action they will take.

Lothian Buses chairman Pilmar Smith said today: "Lothian Buses has increased the number of passengers it carries each year for the last ten years.

"One of the main factors in achieving that growth has been our affordable fares policy. This policy and the passenger growth is now being jeopardised."

The firm's managing director Ian Craig added: "The increase in tax on bus fuel and the reduction in payments for carrying free concessionary passengers are most unwelcome, and will force us to take action to increase revenue, or cut costs, to balance the books."

Lothian Buses had already drawn up a budget based on keeping its £1 flat fare for a third year. However, a 10p rise either in April or soon afterwards is now thought to be on the cards. Daysaver fares should remain untouched, with Ridacard prices uncertain.

The Westminster government raised fuel duty by 2p per litre in October last year, with a further 2p earmarked for April. Normally, local bus operators avoid these costs through the rebate system, which increases proportionally.

However, the Scottish Government did not award the extra compensation in October and the SNP's budget does not indicate an increase in the £61m rebate for the next three years.

For Lothian Buses, the 4p tax hike is likely to add around £1m to its operating costs, aside from the ever-increasing cost of fuel.

Meanwhile, the Scottish Government's free travel scheme for pensioners and the disabled is already threatening to exhaust its budget.

Around £163m was set aside this year, which is supposed to reimburse bus operators 73 per cent of the average adult fare, but it thought this fell around £3m short of the required amount.

Although the fund is to increase to around £177m in 2008-9, bus operators believe this is inadequate given its popularity.

The Scottish Government included an extra £4m for the fuel duty rebate in February's budget, however operators insist this was not an increase, and only covers a shortfall identified in the figures.

But a government spokesman said: "Scottish Government support for bus services is already considerable, amounting to some £260m per year. Last month, ministers announced an additional £4m for the bus service operators grant, meaning a further seven per cent increase in this grant."

The spokesman claimed Lothian Buses' fuel duty shortfall amounts to £400,000, and he said a 10p increase would generate over £10m for the company. However, Lothian Buses said such a rise would equate to £2.9m.

• www.lothianbuses.com