Every word as bus bosses at First and Stagecoach respond to South Yorkshire mayor Dan Jarvis’ criticism

Martin Griffiths, chief executive, Stagecoach Group Plc

Dear Dan,

Thank you for your letter on Febuary 8, regarding the future of bus services in South Yorkshire.

We share your ambition to secure the best bus network possible for the region as we emerge from the pandemic, building on the consistently collaborative approach we have taken with national government, yourself as mayor, the Combined Authority, and other local partners throughout the past two years.

We are firmly committed to maximising the opportunities ahead from the Enhanced Partnership, as we seek to drive a shift away from cars towards public transport and active travel.

Our approach is absolutely focused on the long term – the future of our business and the jobs of the people we employ depends on securing a long term passenger base. Achieving that objective is the responsibility of us all and it is influenced by the decisions of national government, regional authorities and transport providers.

Current transport taxation policy, insufficient action to address car congestion and a lack of incentives to encourage a change in travel behaviour all continue to put pressure on fares and undermine the viability of bus networks across the country. Additionally, measures taken to address the pandemic continue to impact bus use, which remains below pre-pandemic levels.

We have been grateful for central and local government support during the pandemic. For most of the pandemic, bus operators received support which was designed to make sure operators broke even.

Funding bridged the gap between reduced passenger fares – due to government restrictions – and the costs of running services, as well as covering finance costs related to the debt which pays for our investment in depots and new vehicles, both of which ultimately benefit the communities we serve.

More recently, with restrictions easing, bus operators have taken greater financial risk on passenger volumes and these remain significantly below pre-Covid levels. Government support, combined with the steps we have taken to protect jobs and services, has kept bus networks on life-support.

However, it is critical that there is urgent confirmation of government funding beyond the end of March 2022 to avoid a cliff-edge for the country’s bus networks. We appreciate your support and that of other mayors in making that case at national level.

However, it cannot be ignored that the pandemic has accelerated long-term changes to our economy and communities, including in people’s travel patterns. Even with any further government funding, bus networks across the country simply cannot return to their pre-pandemic form.

We will continue to seek to maximise the scope of our bus networks, but they must also reflect those changed travel patterns.

We must also plan for a scenario where the funding from government is insufficient to ensure a measured transition.

We are also acutely aware of the cost-of-living crisis we are seeing in our communities. For more than two years, Stagecoach’s own fares in the region have been frozen.

At the same time, since 2019, costs have increased by around 12 per cent. The reality, however, is that this is not a sustainable position when passenger numbers remain significantly below pre-pandemic levels.

Passenger fares are used to pay for the rising costs of running services, including pay for bus employees who have worked hard to keep communities connected and services running during the pandemic.

Fares also pay for investment in improvements for customers and new greener vehicles. Stagecoach has consistently delivered some of the lowest ticket prices in the country and we remain committed to keeping fares as low as possible for our customers.

In terms of the Supertram system, you will no doubt have been briefed that it has continued to make losses throughout the period of government funding. The baseline position is that it is funded only to the pre-Covid level of losses, having been impacted by the now completed rail replacement works.

With light rail funding currently due to end in early April, the system faces significantly increasing losses even after applying below inflation fare increases.

Bus operators are not alone in having to make difficult decisions, and we are seeing local authorities making cuts and increasing charges. Indeed, in recent weeks, Sheffield City Council has confirmed plans to reduce the authority’s workforce by more than 160 people. Council tax is to be increased. It is also facing a £14.5million budget gap, which is being plugged from financial reserves. But it admits that this is only a short-term solution and going forward the council will need to take further action to plug the gap.

To help ensure the best outcomes possible in the current environment, it would be useful for our senior management responsible for our services in South Yorkshire to have a roundtable meeting with yourself and all parties involved in the delivery of public transport in the region.

To help take that forward, I have asked Stagecoach Regional Director Michelle Hargreaves and Tim Bilby, Managing Director of Stagecoach Supertram, to make contact with your office.

All of us – citizens, businesses and government – face a challenging period ahead. But if we focus our energy on understanding the practical realities and accepting that some changes are necessary, we will be better placed to make the right decisions.

We will also be best placed to deliver our shared objectives around economic recovery, levelling up our regions and securing a net zero future for our country.

Nigel Eggleton, Managing Director at First South Yorkshire

It is important for the sustainability and improvement of public transport provision in the city that we work closely with SYPTE, Travelmaster and other stakeholder partners.

The decision by ‘Travelmaster’ to revise the multi-operator ticket range is an action we support.

It has been two years since there has been any change to this ticket range and as everyone will be aware, a lot has changed over this time with price increases in retail, utilities, cost of living and taxes.

Public transport providers are no different to any other business, whose costs are rising significantly, it is a fine balance and we are doing everything we can to encourage people back onto buses and at the same time look at all opportunities to develop and improve bus provision in the area. .

It should not be forgotten that our staff have done a commendable job in keeping buses running throughout the pandemic over the last couple of years, and buses have continued to run with the help of financial support from local and central government which is due to end in March/April this year.

However, services in South Yorkshire have not made a profit for nearly 10 years which needs to change if we are to see further development and improvements to public transport infrastructure, investment in new buses, new technology and better more reliable services in the city and surrounding areas.