Questions should be asked after bus deal came out of nowhere
THE sale of Rossendale Transport to the operator of the area’s two main longer-distance bus routes was something of a surprise.
One of the few bus companies to remain under local authority ownership more than 30 years after deregulation, Rossendale Transport – or Rosso as it is now known – has been getting a fair bit of help from the council in recent years.
A report to Rossendale Council’s cabinet a year ago recommended the council take out a mortgage on the company’s Haslingden depot, enabling Rosso to save almost £100k a year by paying back the council rather than the existing firm it had a mortgage with.
The aim by the council, according to the report in September 2016, was to help the sustainability of the bus operator going forward – effectively the council would use its ability to get lowerinterest loans than a company can get to help the business it owned.
At the same time, Rossendale Transport was also dealing with a pensions deficit for those people whose pensions dated back to when Rossendale Transport was essentially a council department – so up until deregulation.
That deficit, which sits on its accounts, showed a £1.24m gap last year.
So Rossendale Council proposed to transfer the deficit across the council, and charge Rosso an additional fee for the next 13 years at around £50k a year. The aim of both projects was to make Rossendale Transport sustainable into the future.
And it appears to have worked.
Accounts filed by Rossendale Transport a couple of months ago, showed the company made profit before tax of £197k, compared to £20k in the year to March 2016. So why sell it? The council insist the sale/disposal of Rossendale Transport isn’t about sorting out the council’s finances.
But there’s no doubt this deal is well, a big deal, for our area.
Rossendale Transport dates back to 1907, back to when two motor transport companies were run independently by Haslingden and Rawtenstall Corporations.
In effect, it has over a century of public sector investment, both in terms of cash and management, in it. It’s essential the council is as open as possible about the actuals of the deal, and the thinking behind it.
The sale to Transdev comes after the council had to work very hard to convince the company – which runs the Witch Way bus service to Manchester amongst others – to even consider signing up to use the new bus station.
As a result of those negotiations, discounted fees for using the bus station have been agreed, and the council is also offering a town centre park and ride car park for people who want to travel to Manchester – much to the anger of many in Rawtenstall town centre.
Rossendale Transport is due to manage the new bus station.
As a result of the new deal, a company which a year ago needed convincing it needed to use the bus station is now, through its new subsidiary, going to be running it.
Commitments have been made about investment in new buses – Transdev promise to spend £3m, similar to the amount invested when they purchased Blackburn Transport a few years ago.
Unlike Blackburn, though, Transdev has committed to retaining the name Rosso.
The deal has come out of nowhere – at least if you go through public minutes of council meetings.
In 2015, councillors discussed Rossendale Transport with its managers at a scrutiny committee meeting, but barred the press and public from listening to that part of the meeting.
The decision to rubber stamp the deal was due to be taken at a special council meeting on Wednesday, which was also slated to be held in private.
This is a big deal for Rossendale – it’s up there with the management of the multi-million pound Spinning Point development in the town centre and the chaotic collapse of the multimillion pound Empty Homes project too – and warrants public scrutiny.
How did this deal come about? Why has the council never previously publicised considering disposing of Rossendale Transport?
Why Transdev, who will have a near monopoly on bus routes now?
Were other firms, such as Stagecoach or First, approached?
What assurances have been given about unprofitable routes?
What commitment has been given about use of the bus station and supporting it?
What about commitment to retain staffing numbers – currently around 240 – where they are now?
And what happens to the deals the council put in place to support Rossendale Transport only a few months ago?
It isn’t good enough to just be told a deal is good news for the borough.
Full scrutiny of the deal is required – something hopefully the borough’s scrutiny committee will offer to do, in public.