BUS passengers on the Island could face massive ticket price rises if the IW Council and Southern Vectis cannot resolve a row over how the concessionary fares scheme for the over-60s is funded.
Currently the IW Council pays the bus firm 76 per cent of each concesionary fare but wants to cut this back to 48 per cent.
It says Southern Vectis would make a huge profit out of the scheme if the current subsidy level was continued in 2008-9, because far more journeys are being taken than was originally forseen.
However, Marc Morgan Huws, operations and commercial manager at the company, said the new levels of subsidy would leave it out of pocket by more than £1 million and force it to increase normal fares by up to 54 per cent.
He highlighted the additional cost of running extra buses and employing more drivers to meet the increasing demand.
Government advice is that bus operators must be no better or worse off as a result of the concessionary bus fares scheme.
The council will consider reducing the level to 48.05 per cent at the Cabinet meeting next Tuesday. It believes the proposed level was based on government guidelines.
The Cabinet will also consider a package of concessionary bus travel, which not only includes the requirements of the new national free travel scheme set to come in next April but also continues free travel for the over 60s during peak hours and on IslandLine rail services.
Subsidised travel for those with severe and enduring mental health issues is also recommended to continue.
Mr Morgan Huws described the proposed subsidy level as “grossly low” and said the company would appeal to the government if it was passed.
With an appeal likely to take up to a year, Mr Morgan Huws said the company would be forced to take immediate action to recover costs by increasing prices. These are likely to come in towards the end of this year.
“We never asked for a national free travel scheme and we have every right to recover the money that should be paid to us for that travel. The IW Council is trying to get us to subsidise the scheme because they don’t want to put the council tax up,” claimed Mr Morgan Huws.
He said the report to go before the Cabinet glossed over the fact Southern Vectis heavily discounted the council’s popular Student Rider scheme, which gives those in full-time education the ability to travel anywhere for 50p.
It is anticipated around 1.5 million Student Rider journeys will be made this year.
He said: “We gave them a good deal on the Student Rider because it’s tied to a fair repayment on the disabled and over-60s concessionary fare scheme. However, if they implement this scheme we will be seeking appropriate renumeration for the Student Rider.”
He added the Go-Ahead group, which acquired Southern Vectis in July 2005, had successfully appealed reimbursement arrangements in other parts of the country.
It is expected by the end of the financial year, nearly 2.8 million subsidised journeys will have been made — more than double than in 2005/06. The cost of concessionary travel last year was £3 million but this year it is expected to rise to £5 million.
Such a shift onto the buses is almost unprecedented in the UK.
Council leader Cllr David Pugh said: “The concessionary fares scheme is about offering free travel to those who may need it most, not strengthening the financial standing of private companies.
“The council is suggesting a way forward that continues to support bus travellers at unprecedented levels. But we, as a responsible authority, must ensure that taxpayers’ money is used to serve public interest, not private gain.”
The council also disputed it had glossed over any facts and the Cabinet would be fully aware of all the implications.