(13 Jan 2015, 5:37 pm)Robert wrote Exactly, so GNE should be able to manage perfectly. I know im kind of going back on a previous point about the Independents being able manage but in a way, Stanley Travel operated the service for at least 5 years. 5 years of free bus passes (going to integrate a question into this: Do the council pay for OAP's or any free bus pass holders fare? I should know the answer to this [yes because my free travel to school is funded for by the council] but i just want somebody elses thought on the subject) to realise that the service is no longer able to be operated well? 
My suggestion for why Stanley Travel couldnt operate the services anymore is the fact that they were using OO03 STX which is essentially a high floor vehicle as the chances of them using the side ramp in the middle of a route being unlikely. Climbing up a step would put me off and probably put them passengers off aswell and this would probably lose custom to GNE anyway. Thats probably the only reason why this particular Independent struggled to manage the service for longer than they did. Hunters is probably the same, all they used was Mercedes Varios.

Not quite sure I understand the scope of your question, so I'll try and give both possible answers.

Yes. The council reimburse the operator for OAP's or anyone's fare in the ENCTS scheme, with a pass issued by Durham County Council. Its supposed to be on a no better off/worse off basis, but I'd guess operators are worse off than they would have been previously, looking at the decline in services over the year. The amount of reimbursement is worked out as an 'average' fare, which takes into account the range of tickets available, range of fares, etc. Quite a messy system really, and ill-thought out in my opinion. 

For the other answer. If the service is not commercially viable for GNE, then unless there's some other incentive for running the service, then they'll withdraw it over time. It's then up to Durham County Council to decide whether it's vital that they fund a level of secured service for the route. It'll have to be good these days, as the only thing councils seem to be good at, is telling you how skint they are!

HTH