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GM puts bus franchising on ice as Covid-19 costs are itemised


26 June 2020

Greater Manchester Combined Authority has kicked a decision on its bus franchising plans into the long grass because of Covid-19.

Presenting a report about the franchise consultation exercise to this week’s meeting of the GMCA, Eamonn Boylan, the chief executive of Transport for Greater Manchester and the CA, said: “It is not considered appropriate for the GMCA to publish a formal response to the consultation as required by the Bus Services Act, or for the mayor to make a decision in respect of the proposed bus franchising scheme at this time.” 

He said that, before any final decision on franchising could be taken, consideration had to be given to the impacts Covid-19 may have on Greater Manchester’s bus market and the options considered in the assessment. It would be necessary to consider how Covid-19  “impacts on the assessment, audit and consultation already undertaken, and the potential need to reconsider some of that work”. 

“The outcome of that work will determine if there is a need to repeat some or all of the process set out in the Bus Services Act.”

The GMCA has meanwhile shared further details of the financial pressures facing the ten metropolitan districts as a result of the virus pandemic.

The councils face an expected shortfall in 2020/21, after Government grants are taken into account, of £460m. This falls to £368m after taking into account the use of council reserves. 

The £368m includes an expected £32m shortfall on Metrolink operations (£57m lost income minus £25m Government  grant). TfGM’s non-Metrolink shortfall is £8m (extra costs £1.5m, reduced income £6.5m).

The anticipated income lost from the Manchester Airport Group dividend is more than £100m. Manchester City Council is most badly hit because it has a 35 per cent equity stake in the airport. “The financial impact of the loss of at least two years dividend cannot be sustained without a significant impact on the council’s budget position,” said GMCA. 

“There is now the combined impact for the Greater Manchester local authorities and Manchester City Council in particular, of the loss of income and due to the lack of an airports support package from Government, the need to step in, along with the private sector investment partner, to fill this gap and provide significant additional shareholder support.”

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