Warnings in Edinburgh of extra costs for Council to make-up fares shortfall

If you’ve travelled on any form of public transport over the past couple of years you can’t have failed to notice that passenger numbers have had a drastic fall as a result of a certain global pandemic. Whilst some of the last revenue this has caused has been covered by government grants (from both the respective English and Scottish governments) that funding will soon end and there comes the question of what next as it is likely to be quite some time before passenger numbers even start to approach 100% of previous levels. And when the trams are as political as they are in Edinburgh that question is asked a lot louder and with it being confirmed that the City of Edinburgh Council are to provide over £9 million in funding to cover lost revenue the ever present debate has once again started.

The Final Business Case for the Edinburgh Trams extension to Newhaven has a number of assumptions of passenger numbers which would have helped to cover costs but these are now having to be revised as a result of the widely expected reduction for many years to come.

A new report to the finance committee has now said that the Council needs to budget £7 million to cover the lost revenue in 2023/4 and then £9.25 million each year from 2024/25. In addition to this the Council is having to fund the free travel for under 22s on the trams which isn’t part of the government settlement for that policy as it only covers buses which is said to be £1 million in year one and then a further £1.5 million after that.

The report actually says: “As the longer-term impacts of the pandemic become clearer, the council will work with Edinburgh Trams to establish revised farebox income projections. While the position remains uncertain, however, it is prudent to plan support for the tram system, if required.”

Cllr Lesley Macinnes, Transport Convener, said: “Since the emergence of the pandemic, we’ve carried out regular reviews of the project’s business case, which takes into account future farebox revenues as a means of repaying the loans borrowed to construct the tram. As a result, additional financial support is being earmarked, while further analysis of the projected long term patronage is undertaken as Covid restrictions are relaxed and travel habits evolve. We will of course be continuing to look at ways of mitigating these sums.”

Opposition Councillors are obviously not impressed with this news with Scottish Tories finance spokesman, Andrew Johnston, quoted in the Edinburgh Evening News: “They are finally being honest about the trams and saying the dividend will never be paid [the Lothian Buses dividend which had originally been expected to help cover some of the costs but is now not likely to be available but would instead be covered by lower borrowing costs] and the council is going to have to prop up the trams to the tune of £9.25m a year because they won’t bring in the ticket income they said. Their business case, which was ‘We’re going to make so much money on tickets it’ll pay for itself’, is not true. Instead it will need £9.25m a year to fund that. That’s a lot of money when this was meant to be a sensible and affordable thing to do at the time.”

It’s a story which will likely run and run that’s for sure.

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