Lothian Buses: 'The council and the company face a dilemma'

IT was to be expected that the city's largest public transport operator – Lothian Buses – would eventually face tough choices as fuel prices continue to soar.

But should a decision be taken to axe non-profitable services it will be unpopular and the wrath of those affected is more likely to fall on the largest shareholders – the city council – rather than on the company itself.

Everyone who needs to put a vehicle on the road is feeling the pinch of rising fuel costs. While it is possible to have some sympathy with the likes of taxi drivers who are having to absorb the additional fuel costs – and will not have the opportunity in the near future to seek to have the fare structure altered by the council – they are just one of a number of victims of spiralling oil prices. This newspaper has already highlighted the plight of local haulage contractors who are having to deliver at rates which were agreed before fuel prices rose and can do nothing but operate on reduced margins. The same will hold true any organisation which relies on vehicles for distribution or trade.

But a special case can be argued for buses, and in particular Lothian Buses which, although commercially autonomous, is almost wholly owned by the council and provides not only a valuable local service but substantially helps reduce congestion in the city.

The quality and range of its services encouraged over 114 million journeys last year and Edinburgh remains the city with the highest bus usage per head of population in the country.

In April the company raised the cost of an adult single fare by 10p to £1.10 after it was revealed it was on target to record a shortfall of £400,000 largely due to rising fuel costs and a Scottish Government freeze on a rebate to transport operators to cover rising costs. But this has proved inadequate as diesel prices continue to rise

The council and the company between them now face a tricky dilemma. Should Lothian Buses increase its fares again so soon to put it back on track or run the risk of being forced to axe non-profitable routes to balance the books? And if it is driven to do the latter, should the council step in and offer to subsidise routes that are at risk to maintain a more comprehensive network as part of a service to the public? The alternative would be for Edinburgh to seek to persuade its partner councils to waive at least part of the near £2 million dividend they are due to receive from the company this year.

Either way, tough choices will have to be made by someone.