Outrage as bus firm which hiked prices and cut services makes £15m profit

Brighton and Hove Bus and Coach Company’s seven directors were paid £2 million between them in the financial year ending July 2017.

Managing director Martin Harris was paid more than the Prime Minister.

Parent company Go Ahead got £22 million from the business – which it says it will reinvest in buses and improvements.

It comes three months after fares went up and night buses were cut across the city.

Transport campaigner Steve Percy said: “Should these people get these amounts of money and cut the bus service?

“If you’re making that much money, you don’t need to cut the bus services.

“If a bus route isn’t making money they can afford to still run it if the other routes are making that much money.”

Andrew Boag, chairman of Brighton and Hove Buswatch, said: “I am shocked and disappointed that fares have just been increased and night bus routes cut at a time when the company is making such healthy profits.

“I’m sure many users will feel outraged about having to pay more.”

Peter Kyle, MP for Hove, said: “Why aren’t buses run for passengers – not just for profit?

“This year we had large price increases and the scrapping of night bus services – all of which hit the poorest workers in the city.”

Brighton and Hove City Council gives the city’s bus companies, including Brighton and Hove Buses, £10 million a year towards the cost of concessionary fares for the elderly and disabled.

It gives £1 million a year to subsidise routes which would otherwise be unviable.

A council spokesman said: “While some services are sometimes deemed non-viable, there are others where a bus company has agreed to take on all or part of a route and run it commercially as part of the tendering process.

“In recent years these have included the company’s 77 ‘Breeze up the Downs’ summer service to Devil’s Dyke, and their 21 route service for evening and Sunday journeys at the western end of the route.”

It said reimbursement for concessionary fares is based on a national formula and locally the deal was a result of “detailed negotiations” and is “offering good value for money”.

In January, Brighton and Hove Buses’ night services were scrapped to several areas of the city and most of the company’s fares went up.

After an outcry, the company said it would consult further on night bus services.

Yesterday Brighton and Hove Buses’ managing director Martin Harris said: “We’re planning to openly report on exactly where our money goes to all of our customers and stakeholders and this will be available very soon.

“Our entire network is almost completely operated at commercial risk without subsidy, apart from a few school bus services and the Breeze up to the Downs buses.”

WHAT THE ACCOUNTS REVEAL

COMPANY accounts aren’t everyone’s idea of a riveting read, but when that company gets £10 million a year from the council it’s worth taking a look.

Especially when that company cut services for vulnerable people last year, saying it couldn’t afford to keep them going.

Particularly when the company raised 80 per cent of its prices last year.

So what do the latest accounts from Brighton and Hove Bus and Coach Company Ltd tell us?

In financial year 2016/17, which ended on July 1 last year, the company made an operating profit of £15.5 million.

That was a 16 per cent profit on a turnover of £96 million.

Industry expert Andrew Boag who now runs Brighton and Hove Buswatch told The Argus: “That’s good for the industry.

“I’d say a lot of companies would say they’re doing well if they make 10 per cent.”

That profit of £15,567,000 was 17 per cent higher than the £13.1 million the company made the previous year.

Passenger satisfaction averaged 91 per cent, buoyed, the reports say, by an award winning accessibility scheme and wifi and USB charging on the buses.

The Strategic Report identifies opportunities in the expanding populations of the company’s areas of operation (the firm also runs the Metrobus brand in Crawley).

And it concludes “Our three year agreement with Brighton and Hove City Council for concessionary fare reimbursement reduces uncertainty on a large proportion of our revenue.”

Last year Brighton and Hove City Council paid £10.9 million to bus operators (including Brighton and Hove Buses and the much smaller firms the Big Lemon Bus Company and Compass Travel) towards the cost of concessionary bus tickets for the elderly and disabled.

It has paid more than £10 million a year since at least 2013.

A council spokesman said: “Reimbursement for concessionary fares is based on a national formula.

“It states that operators should be left ‘no better and no worse off’ as a result of concessionary travel schemes.

“We are currently in a three-year agreement made with our local bus operators [which was] the result of detailed negotiations and is offering good value for money compared to many other areas of the country.”

Brighton and Hove Buses’ accounts also tell us how much the company, which receives all this public money, paid its directors and its shareholders.

It was a lot.

Five men who are directors of Brighton and Hove Bus and Coach Company Ltd, including managing director Martin Harris, shared £778,000 in salary, bonuses, and pension contributions.

Mr Harris took a more-than-equal share of £205,000. That is 43 per cent more than the Prime Minister’s salary of £142,500.

Two other men who complete the Brighton and Hove Buses board were paid £1,223,000 between them.

Those men are David Allen Brown and Simon Patrick Butcher, the chief executive and chief financial officer of the firm’s parent company The Go Ahead Group.

The accounts say it is not possible to allocate Mr Brown and Mr Butcher’s pay among the group’s subsidiaries.

So their £611,000-a-piece pay did not come exclusively from Brighton and Hove Buses.

But it does bring the total paid to Brighton and Hove Buses’ seven directors to £2 million last year.

The shareholder - the Go Ahead Group - did even better.

After paying no dividend the previous year, last year Brighton and Hove Bus and Coach Company Ltd paid out £22 million in dividends.

Managing director Martin Harris said: “They are not dividends in the traditional sense.

“Our parent company is our shareholder to whom we pay our profit and who, in return, makes our big investments for us such as the £11 million we spent on 31 new next generation nearly emissions-free buses in 2017.”

He said the group uses its to invest in the city, and for the good of the environment, its customers, and the community.

JUST THREE MONTHS SINCE SERVICES CUT

JUST three months ago passengers of Brighton and Hove Buses were hit with a double-whammy of reduced services and increased prices.

A price hike which took place on January 16 saw 80 per cent of fares increase while just a handful were frozen.

Among the increases were the M Ticket smartphone City centrefare up from £2 to £2.10, the 60 Minute ticket from £2.40 to £2.60 and the One Day City Saver from £4.20 to £4.40.

Among the longer term tickets to increase are the Network Saver 28 day, up from £77 to £81, the Network Saver 90 day from £205 to £215 and Network Saver 12 months from £635 to £665.

Just days previously, passengers lost night bus services serving Preston Park, Patcham and Hollingbury.

Night services to Portslade and New Church Road were also reduced.

At the time boss Martin Harris said that services including the N1 and N5 were “usually empty”.

Last week the firm reopened a consultation on this issue.

Yesterday Martin Harris said: “In the financial year 2016/17, our profits spiked thanks to healthy passenger growth and some good economies on our part. And in that year our annual fare review was well below inflation at just 1.5 per cent and the majority of our fares remained frozen”

“In the calendar year 2017 our revenue dropped because of weaker passenger numbers.”