Preston Bus says that proposed changes to the price structure for running vehicles from the iconic building may lead to certain routes being diverted to on-street bus stops - and some less profitable ones disappearing altogether.
The company which, along with rivals Stagecoach, controls the majority of the bus market in the city, said fares could also rise “as a last resort”. The firm has appealed for a “meaningful discussion” with Lancashire County Council, which owns the 50-year-old site.
The authority has laid out a plan to drive the down cost of running the recently-refurbished facility, which was officially reopened last year after a £19m facelift. It wants to bring the Preston terminus in-line with the three others which it operates in the county - in Chorley, Accrington and Nelson.
Bus companies currently pay a flat rate of £5,650 per year for every bay which is allocated to one of their services at the station. But under plans to be considered by cabinet members on Thursday, a departure charge will be introduced instead - meaning firms will pay every time one of their services leaves the site.
County Hall estimates that the average increase in costs for bus companies will be more than 50 percent - and Preston Bus claims that it will put an unfair - and unsustainable - burden on operators.
“We appreciate the position which the county council is in financially, but it appears to be an exercise of balancing their books by transferring costs onto operators and their customers, without any input as to whether those costs are justifiable”, Preston Bus commercial manager, John Asquith, said.
“If these proposals are passed, there will be repercussions for both parties and, more importantly, for those who travel by bus.”
The firm even raised the prospect of cancelling its contracts to run the council’s subsidised services and school operations - and then rebidding for them at a higher price to cover the increased cost of operating their commercial routes.
John Asquith said he was disappointed that the proposal had been presented to the company on 23rd January after “waiting months” for the council to return to discussions which began nearly a year ago. However, he thanked Conservative cabinet member for transport, Keith Iddon, for agreeing to an urgent meeting about the plans - and for ensuring the new charges would be phased in.
If the proposal is agreed, operators will have to pay 55 pence each time one of their vehicles departs from the station as of April. The charge would rise to 85 pence by 2021.
The other county council-owned bus stations already charge 75 pence per departure - a fee which is also set to rise to 85 pence over the same period.
Preston Bus says it does not object to the changes in principle - but wants them to be “affordable” and to reflect the size of vehicle being used.
“The council needs to differentiate [between] departure costs for minibuses and those for larger single deck or double deck vehicles. They are planning to charge the same fee for a service struggling to break even as they are for an inter-urban route that might be travelling miles and charging a £5 fare,” John Asquith said.
Warning of the potential impact on less popular routes, he added: “If two people are travelling on a bus and each has paid 80 pence, then this charge would make it the equivalent of having only one person using the service.”
Preston’s other main bus operator, Stagecoach, also warned that passengers may feel the impact of any increase in charges for the company.
Rob Jones, managing director of the Stagecoach division covering the city, said: “We have been consulted on the plans to replace an annual bay rental charge at Preston Bus Station with a departure fee. This is a sharp increase which is being placed upon operators at very short notice and we are working closely with the relevant cabinet member to do everything we can to avoid a situation where local services are impacted.”
Plans to scrap the bay rental charge in favour of a departure fee were first put forward by the previous Labour administration in 2016. But the proposal - then for a planned fee of £1 per departure - was postponed until after completion of renovation works at the facility.
FALLOUT FROM FEE INCREASE
Preston Bus has outlined measures which it might have to take if the current proposal gets the green light.
Remove journeys that have very few passengers boarding and alighting at the bus station - for instance, during early mornings, evenings and Sundays.
Remove some services altogether from the bus station, using on-street bus stops instead.
Withdraw ‘marginal’ journeys and services.
Cancel tendered school and local service journeys to re-bid at higher prices to pay for the enforced increased costs.
Fare increase – “a last resort option”.
COUNTING THE COST
The annual bill for running Preston bus station is £1.3m. But Lancashire County Council currently has a budget for the facility of less than half that amount - just £516,000.
After bus operators have paid their bay rental charges, County Hall will still be left with a deficit of £348,000 in 2018/19.
Responding to criticism of plans to increase charges for operators at the terminus, cabinet member for transport, Keith Iddon, said: “I was pleased to meet with the bus companies to listen to their concerns over these proposals. We're taking this issue seriously and will discuss it at our cabinet meeting next week.”
Papers to be presented to that meeting reveal that the current charging structure does not reflect actual usage of the bus station by individual operators. They also warn that a flat fee could be a barrier to smaller companies entering the market.
“The current arrangements could be seen to favour larger operators which could be construed as anti-competitive. [They] could be a disincentive to a new operator who wanted to run a small number of services from this bus station,” the report notes.
If the proposal goes ahead, the county council will still be spending £69,000 more than it has budgeted for on operating the bus station by 2021.
Preston Bus says that the costs incurred by the authority do not relate wholly to bus usage and suggest they should be “realigned” to the operation of the car park on the site and wider public realm.
£438,000 - income from bay rental fees (2019/20)
£717,000 - estimated income from departure fees (2021/22)
£2.4m - pre-tax profit made by Preston Bus operator Rotala PLC (2017)
£144m - pre-tax profit made by Stagecoach Group (2018)