Price agreed for Plymouth Citybus

CITYBUS is set to be sold for £20million in a deal that promises to protect jobs and routes in the immediate future.

The transport giant Go-Ahead, has offered to buy the Plymouth council-owned bus company for £20.2million. Adjustments for debt and other payments would bring the amount the council receives down to £19.58million.

Members of the city Cabinet agreed yesterday to accept the offer and recommend it to the full council. If councillors agree to sell Citybus at their meeting on November 30, the deal will go through later in that week. The Citybus name will stay, though Go-Ahead may change the livery.

Go-Ahead, one of five companies which submitted offers for Citybus, has agreed to maintain the school routes operated by Citybus for at least three years. Other existing routes will be protected for at least six months with no changes. After that the council will be given 90 days notice of proposed changes.

There will be no compulsory redundancies for Citybus drivers for local bus services for the next 12 months.

Labour group leader Tudor Evans attacked the process last night after Cabinet members heard the commercial details in a private meeting, before opening the Cabinet room doors to the public to make their final decision.

"It's unprecedented that a deal of this magnitude should be decided in secret," Mr Evans said. "A lot of this is jam tomorrow. It doesn't guarantee to maintain services in the short or medium term.

"It doesn't guarantee jobs, and it will have a negative impact on council tax."

Mr Evans said that a hole in the pension scheme for Citybus employees would cost the council an estimated £225,000 a year.

The £946,000 set aside by the council to set up the deal would reduce the actual profit to the city.

Council leader Vivien Pengelly said: "Go-Ahead is an honourable and forward-thinking company that wants to invest in Plymouth and create a newer, greener and more popular bus service.

"Go-Ahead has recently received a host of awards for being environmentally friendly and a company that cares about 'Green' issues.

"Its Brighton and Hove company was recently crowned with the award for the best UK bus operator."

Council officer John Cremins, who led the negotiations, said the Plymouth offer was higher than that reported for recent sales in Chester (about £2million), Preston (£6.4million) and Bournemouth (£13.8million).

According to statistics, bus patronage in areas where the Go-Ahead Group operates grew by 5.3 per cent during the four years to March 31, 2008.

By contrast, in Plymouth patronage grew by 3.6 per cent. However, Mr Evans later insisted that this was because Plymouth was starting from a higher point.

The sell-off proposal has been widely opposed by unions and the Labour Party.

A petition with 20,328 signatories, opposing a sale, was delivered to the council in August.

The council believes that the sale of Citybus will free up assets that can be invested elsewhere for a better return.

The city has received an annual dividend from Citybus averaging £270,000 a year. A report to the city council on November 30 will say that this dividend cannot be guaranteed in future because the company's financial performance is subject to competition, turbulent fuel prices, uncertain use, changes to the regulatory environment and the performance of the overall economy.

Cabinet member Glenn Jordan said Go-Ahead was committed to reducing the age of the bus fleet and bringing in a modern system for reducing fuel use by five per cent.

Finance chief Cllr Ian Bowyer said: "This is a brilliant price for the council and for the city as a whole.

"I don't think there can be any quibbles about the price."

He reassured passengers that concessionary fares would continue as before.

Cabinet member Steve Ricketts said: "People will be happy to see their familiar buses around the city.

"Do we believe the council should be running bus companies? I don't think we should be."