Tetchytyke
Veteran Member
Yes, but was the cut in the rate justified or not? Were they overpaying previously, or had circumstances changed? Companies do go bust and I've seen a number of iffy bus P&Ls.
There's never one sole reason for a company going under.
Transdev had started running more buses to Skipton from Pendle, which was Pennine's most profitable route. Western Greyhound's insurer refused to pay out after 30 buses were destroyed in an arson attack.
NYCC's decision to cut the reimbursement rate by 20% was justified in that they didn't have enough money to pay more, and it is a criminal offence for a council officer to set a deficit budget. The decision to cut the reimbursement rate came at the same time as the ENCTS funding formula was changed by central Government, with funding from the DfT stopping.
NYCC's decision had wider implications. Arriva Teesside started charging a "voluntary donation" on their evening and Sunday Whitby town services because they were losing money after the reimbursement rate cut. When DfT told them they weren't allowed to charge this most of the services went.
The fact is we spent £1.2bn on ENCTS last year and, despite that staggering amount of money, it still wasn't adequately funded. When you think the government subsidy for the entire railway network is only £3.5bn, it goes to show what a staggering waste of money the scheme actually is.
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Therefore the reimbursement would not be influenced by what the particular local authority can afford (unless the secretary of state is also part of the conspiracy).
If the TCA take the **** by offering something like 1p as a reimbursement then the Secretary of State will overturn their decision.
All funding for the ENCTS comes from the Formula Grant, which is the lump sum councils get from DCLG for all non-ringfenced services. Councils, by law, cannot spend more than they receive in income.
This is why I am so against the ENCTS. It takes money away from all the other services- libraries, swimming pools, advice, supporting essential transport, non-statutory social care- that councils provide.