Fears Metro fare cap could worsen cash problems
NexusA change in Tyne and Wear Metro fares could make its operator's financial pressures worse, a councillor has warned.
Plans for a price cap on longer journeys using a Pop Card, which were proposed alongside an increase in fares for shorter journeys, would cost the Labour-led North East Combined Authority £1m to subsidise for a year.
Newcastle Liberal Democrat councillor Greg Stone said the cap would give "welcome respite" to some passengers, but that he was "more than a little uncomfortable" with Nexus's financial position.
Nexus said the new fare deals would make the Metro more attractive, grow its passenger numbers and help them meet their running costs.
Finance chiefs previously warned inflation pressures and a post-Covid drop in passengers were forcing Nexus to spend more than £25m of its reserves in order to balance the books between 2025 and 2029.
However, the latest papers suggested that figure had fallen to £18m, the Local Democracy Reporting Service said.
Even though the price changes are expected to generate an extra £700,000 of revenue over 12 months, North East mayor Kim McGuinness's office would have to spend about £1m to cover the losses from reducing some of the longer journey costs.
Stone said: "I am concerned that the mayor is making a short-term decision to buy popularity in a pre-election period to distract attention from what appears to be a significant budget gap problem at Nexus, which this splurge is very likely to increase."
The North East mayor was approached for a response to Stone's comments. Her office said she had explained her position previously in saying the pricing shake-up, set to be approved by the North East Combined Authority next week, had been designed to get more people using the network.
"I want everyone in the North East to be able to use public transport so we need to make it cheaper," she said.
Meanwhile, the North East Public Transport Users Group said the fare cap was "obviously great news".
"There are questions about the financial implications for this cap on Nexus, but we hope national and regional government will see the value of investing in improved public transport, and the economic, social and environmental benefits it brings our region," a spokesperson said.
Nexus finance director John Fenwick said it hoped to replicate the success of the £2.50 cap on the region's buses.
"We have recommended a balanced package of fares for 2027, one that will help us to meet our running costs, support the essential services that we deliver, and offer savings to our customers on the cost of travel," he said.
