£7.7m loan for fleet of buses

A massive cash injection into Blackpool's bus services could be approved tonight.

Monday, 23rd May 2016, 10:03 am
Updated Monday, 23rd May 2016, 11:06 am
Blackpool transport demonstrator bus

Blackpool Council’s leaders will be asked to consider a massive £7.74m package to help Blackpool Transport replace its ageing fleet.

The council is considering taking out a loan on behalf of the transport firm - which it owns - to pay for the purchase of 35 new buses.

And, in a report prepared for councillors, the desperate need for investment has been spelled out.

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Simon Blackburn

The report, from Blackpool Council director of resources Steve Thompson, said: “During the past decade the company has not been able to invest regularly in its bus fleet.

“As an illustration, if there are no more buses purchased then by September 2019 74 per cent of the individual buses’ useful economic lives will be expired.

“The effect of operating a fleet with such a skewed age profile is that they are suffering deteriorating reliability causing higher consumption of spare parts.

“There is a need to employ extra engineering labour and the ratio of spare buses to operating buses is very high.

Simon Blackburn

“This last outcome then drives costs even higher.”

According to the report Blackpool Transport intends to buy 110 new buses over the next five years and establish a rolling programme of replacements, with Blackpool Council expecting an annual return of £1m.

The report says: “The combination of the fleet’s very high average age and the council acting in the role of shareholder, with an expectation of a £1m return on its investment means that the bus fleet has to be replaced over as short a time as possible.”

An order has already been placed for 10 double deckers with deliveries expected to begin next month.

Blackpool Transport is understood to be evaluating options for the 2017 order, with a demonstrator vehicle from Alexander Dennis currently operating services in the resort.

Coun Simon Blackburn, leader of Blackpool Council, made it clear the investment made clear sense for both the town and the council owned transport company.

said: “This investment in Blackpool’s buses will mean that they are more reliable, more environmentally friendly and more economic to run.

“Some of the buses Blackpool Transport use are coming to the end of their life and in a few years will become costly to run and no longer road-worthy.

“The benefit to the council accessing prudential borrowing means that Blackpool Transport can buy the vehicles at the outright cost and pay the council back in a finance deal.

“Our access to prudential borrowing makes this a more manageable approach than BTS buying the vehicles outright and, as we know what Blackpool Transport’s accounts look like, we can be guaranteed that they have the money to pay back the loan.”

The loan to Blackpool Transport would be repaid in 120 monthly payments.

Blackpool Council wants to take the loan out on behalf of the firm because, as a local authority, it is likely to get more favourable rates of credit.

Nobody from Blackpool Transport was available to comment.