Transport leaders are set to discuss increasing the amount that local authorities pay to subsidise transport, as the region’s transport network faces major rises in costs and ongoing recovery from the pandemic.

Proposed increases to the transport levies for Tyne and Wear, Northumberland and Durham will be discussed by the North East Joint Transport Committee on 17 January, which are needed to fund and protect vital public transport services right across the region.

The proposed 4% increase in the Tyne and Wear levy takes it to £67.800m for 2023/24 compared to £65.225m in 2022/23. The levy proposed for County Durham is £16.912m (up from £15.619m) and Northumberland’s proposed levy stands at £6.458m (up from £6.357m).

The committee will hear about the escalating costs of providing secured bus services – partly due to increased tender prices but also the growing requirement for Nexus and local authorities, to step in to save local bus services which have been withdrawn or reduced by commercial bus operators. In Tyne and Wear, these costs have grown from £15.327m in 22/23 to £18.4m, in Durham the budget has risen from £2.688m to £4.888m and Northumberland has remained the same at £1.23m. The future of government bus recovery funding is uncertain.

Another consideration for the Committee is the soaring costs of High Voltage (HV) power for the region’s Metro system which have more than doubled (estimated at £21.572m against a base budget of £8.356m) due to global factors outside of Nexus’ control and continued instability in the energy market.  The report outlines that Local Transport Funding (LTF) and the Energy Bill Relief Scheme (EBRS) combined have provided Nexus with an estimated £15.738m of unbudgeted grant support which covers the costs for this year, however the escalated costs will lead to a significant forecasted deficit of £10.6m in 23/24.

A greater reliance on Nexus reserves will be needed in the coming year to balance the budget the committee will hear, to ensure transport services in Tyne and Wear are there for local communities. It is likely a further contribution will be required in 2024/25 unless further support from Government is received.

Cllr Martin Gannon, Chair, Joint Transport Committee, said: “Local authorities are already battling overstretched budgets however once again, we have little choice here but to step up to increase the money we put forward to fund our transport system. We are committed to delivering an excellent transport network for our communities however reduced budgets and inflationary pressures are alarming, and more clarity is needed from Government on a longer-term solution.

“Transport – in particular our bus and Metro services – are absolute lifelines for residents to access work, education and leisure opportunities and we must take steps to secure our vital public transport services for the future.

“We’ve been hit by major pressures including lower passenger figures as a result of the devastating pandemic, alongside eye-watering energy costs which have more than doubled in recent months and escalating costs to provide secured bus services following commercial operator cuts. Thankfully the energy costs have been met this year however next year, Nexus is looking at a significant deficit which will likely need to be met by using substantial reserves. It is not sustainable in the long-term to use reserves which should be held for unplanned emergencies and puts us at great risk.

“The local authorities will of course do what we must do to safeguard the transport network but make no mistake, the Government must put local public transport on sustainable footing and provide certainty on how much support for energy and bus services will be available in the coming year.”