Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Supplementary memorandum by Stagecoach Group (Bus 48A)

  I am concerned that the Transport Sub-Committee may have received a misleading impression from a statement made by Brian Welch, of Northamptonshire County Council, in his evidence to the Committee on Wednesday 8 May.

  In his evidence, Mr Welch stated that Northamptonshire County Council had been given only eight weeks' notice of the operator's intention to withdraw services in Corby. On questioning, he stated that the operator concerned was Stagecoach.

  However, this fails to give a complete and correct impression of the level of consultation between Stagecoach and the County Council that had gone on before the notice period and which continues to take place.

  The complete sequence of events is outlined below. It should also be stated by way of preface that Corby operations had been a financial concern ever since Stagecoach acquired the local company in 1987 and this would have been known to the County Council:

    —  in May 1999, the Managing Director of our local company, United Counties, met Mr Welch and advised him that the company was facing financial difficulties in sustaining the operation in Corby and this situation was confirmed in writing at Mr Welch's request;

    —  in July 1999 a further meeting took place with Mr Welch concerning, inter alia, a cost-saving package for Corby due to be implemented in October 1999, but in the event implemented on 29 November 1999;

    —  in August 1999, a further meeting took place, this time involving not only Mr Welch and his immediate superior, but also the Leader and Chief Executive of the County Council, at which meeting the County Council was given early warning that the company was facing a serious position, but that no drastic action would be taken until the changes planned for October had been implemented, in order to evaluate their results. The County Council representatives acknowledged the position and thanked the company for its early warning. Shortly afterwards, a similar meeting took place with Phil Hope MP;

    —  on 9 September 1999, the company flagged its concerns at a meeting with the Government Office, followed by a similar one on 27 September with the Chief Executive of Corby Borough Council;

    —  on 29 November 1999, the service changes referred to above were implemented, following which Stagecoach continued to operate for a further 13 months, although the changes in the event failed to improve the financial position;

    —  during the first half of 2000, a series of Local Transport Plan meetings took place with the County Council, at which the County Council would have been updated on the current Corby situation;

    —  as a result of the failure of the September 1999 changes to improve the financial position, the decision was taken to make further significant service deregistrations; Mr Welch was advised prior to the registrations being lodged, which was eight weeks before the deregistration date;

    —  in view of these deregistrations, the County Council implemented an 18-month rescue package to take effect from the same date, pending a review of the longer-term future;

    —  during 2001, Stagecoach helped the County Council mount an Urban Bus Challenge bid for Corby but warned the County that its strategy was risky because it put all its eggs in one basket, with no fall-back if the main bid failed, which it ultimately did;

    —  at the end of 2001, Stagecoach decided to retain and develop two commercial services in Corby (Services 1 and 3);

    —  in early 2002, the County Council sought tenders for the remainder of the Corby services, to take effect at the end of the rescue package period;

    —  there were several bidders (we believe five) for these services, only one of which (Stagecoach) bid for the whole package, and negotiations have since been taking place between the company and County Council over this package.

  I think it also relevant to note that Stagecoach faces similar problems in the Wellingborough area, and started discussions with the County Council in December 2001 on how these services might be secured for the future. The company set a target date of September 2002 for any necessary changes, but has indicated that it is willing to be flexible on this date. These tenders have now already been let and responses received, well ahead of the target date. Despite this, Stagecoach is again being accused locally of giving minimal notice of proposed changes.

  I apologise for setting out the sequence of events in such detail, but I felt it necessary to make it absolutely clear that Stagecoach has taken its community responsibilities very seriously in this matter, and has consulted very widely over a considerable period of time, in sharp contrast to the impression given by Mr Welch.

  In these circumstances, I would therefore be pleased if you would draw the contents of this letter to the attention of each of the Members of the Select Committee.

Keith Cochrane

Chief Executive

22 May 2002

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