Our fares are fair, says bus boss

Some months back, some of you might have read a story about our level of profit in the financial year 2016-17 taken from our annual published accounts. You might even have been surprised at the sums involved in running your local bus company.

I promised then that in future I’d be more open and transparent, showing you exactly where our money comes from and where it goes so you can work out the value of the fare you pay.

Here, you’re seeing an infographic made up of combined figures from the 2016-17 period for the two bus operations – Brighton and Hove Buses and Metrobus – that make up the company Brighton and Hove Buses. It’s how we file our company accounts and run the business so it’s just not possible for us to separate out the stats for each bus operator.

You’ll see that the vast bulk of our revenue (almost 76 per cent) came from you, our passengers. Only a small proportion of our services were subsidised (3.8 per cent). These are the Breeze up to the Downs buses and a handful of school buses. That’s it.

We were reimbursed by councils across our operating area to fund the free travel we provide to concessionary card holders. The amount repaid to us is based on a national formula and makes up 16.3 per cent of our revenue. The repayment rate, considerably lower than a typical fare, is designed to ensure bus operators are neither worse nor better off from concessionary journeys.

The remaining small proportion of our revenue (4.2 per cent) came from our coaching business, advertising income, private hires, tours and commercial contracts.

So just where does every pound of that revenue go?

Running a bus company is a service business so we have to employ a lot of people to deliver that service. That makes employment costs our biggest outlay. Almost half of our revenue went to our 1,522 employees (48p). Unsurprisingly, drivers make up the majority (1,150) with an average salary of £25,000 a year.

Our next biggest outlay (25p) went to suppliers. It’s a big figure because it includes fuel and increasingly eco-friendly fuel comes at a greater cost. We also paid out national insurance and corporation tax at 5p and 3p respectively.

We were able to put 11p into our reserve fund. This will go towards future investments to help meet our pledge to be emissions free by 2030 – which at today’s prices is estimated to cost £172 million. That means that, between now and then, it could cost us £14.3 million each year to buy new buses.

This fund is critical as profit over the next financial year (2017-18) is nothing like that of the previous year.

Some of you will be aware I had to make some difficult decisions at the start of this year. I withdrew a few little-used night buses (some of which are due to return in a matter of weeks), brought forward a fare review and increased prices more than I would have liked. But, these were the right decisions to move us towards being emissions free by 2030.

Part of the 11p reserve fund will go to our only shareholder – our parent company Go Ahead – who combine the profits generated by all their subsidiary companies and use it to pay dividends to their shareholders as well as costs from loans and financing.

Capital investments, at 8p in the pound, went towards our depots, bus infrastructure and their maintenance as well as on new lower emissions buses at a cost of 200,000 each.

Good air quality is an expensive business. Emissions from vehicles cost us our health. Buses have been ahead of the game emitting far fewer toxins than cars for many years but even we can’t afford to delay.

And that brings me to the central question. What is the value of the fare you pay? For some it might be our customer satisfaction rating (91 per cent) or punctuality (85 per cent based on the industry definition, though we aim for higher). For others it might be the 596 night journeys we run every week or the 3,000 bus stops we serve across East and West Sussex, Kent and Surrey, or the 66 million passenger journeys we provide using 430 buses. Or perhaps you think it’s the tens of thousands of pounds’ worth of free tickets we give away every year to charities, schools and community groups.

I think the value of your fare is something greater. It’s about a good bus service sustaining and connecting communities and lives, and reducing social exclusion. It’s about supporting the economy by taking people to work, shops and leisure activities, and about reducing deprivation. It’s also about playing a critical role in the health and welfare of the community by making strenuous efforts to improve the environment. I hope these are things we can all value.

So I’ll keep being open with you about how we spend your money, making it easier for you to assess the real value for money we offer.

Martin Harris is the managing director of Brighton and Hove Buses.