RE: Nexus Tenders | Newcastle & North Tyneside - March 2022
(24 Feb 2022, 9:51 pm)DeltaMan wrote What's happening is simple maths. Its the same sums no matter what the operating model or ownership structure is. If it costs you more to run something then it you take in, then there is an obvious issue.
Simple maths is a very simplistic way of looking at it, when in fact the two are very different issues.
Most deregulated markets have been operating in managed decline for the best part of 25 years. Happy enough to run anything profitable and to send that money straight back to investors. Any accountant can make most things either profitable or loss-making on a balance sheet, and it doesn't help that bus services are always looked at parochially. Anything that is a bit tight, even if its the odd trip, is quickly shoved in the local authorities' direction to sort out. Usually ending up in the situation that the tax payer then funds their business, if not farmed out to another operator. It doesn't increase the operators profits, it just decreases the overhead and cuts more customers off from their bus network.
I was trying to think of examples of other businesses that are able to do this. I wonder what my local shop decided they didn't want to open between 6am-10am for morning papers, should the tax payer fund them to do that instead? Or do we just admit that the model is broken?
On the other hand, TfL's financial issues are politically motivated and most people can see exactly what is happening.
There's an aim to reduce Government funding to 0%, which is why any funding deals lately have been subject to making cuts. It's really no different to what was done to Councils up and down the country since 2010, and I assume TfL are in the same position as Councils whereby they must set a balanced budget every year or the Finance Officer has to issue a section 114 notice.
Who knows what the long-term plan is, but likely to make TfL services attractive enough to be deregulated, carved out and sold off.