BUS fares in Edinburgh are expected to rise next month following a massive cut in government grants and a drop in passenger numbers due to the tram works.
Lothian Buses also plans service changes, including the withdrawal of one route and reduced frequencies on others.
Managing director Ian Craig said the council-owned bus company had suffered a multi-million pound reduction in income because of Scottish Government cuts in the Bus Service Operators Grant (BSOG) and a change in the way it is calculated.
He refused to confirm or deny the single adult fare would increase by 10p to £1.40. But he said an announcement would be made “in the next few weeks”.
Funding for the BSOG has been cut by 20 per cent and payments are no longer based on how much fuel buses use, but how many kilometres they travel, – a change favouring rural operators at the expense of those in urban areas, resulting in an overall cut of up to 40 per cent in the grant for some companies.
Mr Craig said: “It is a very significant reduction in revenue and we are arguably one of the worst affected operators because we operate in an urban area at low speeds with vehicles which are obviously less fuel efficient than minibuses running around rural areas.”
He acknowledged the disruption in the city centre due to the tram works was also “a significant challenge”.
A series of proposed service revisions are in the pipeline, including the withdrawal of the X48 between Ratho, Hallcroft Park and Sheriffhall park-and- ride – though the company says the western end of the route will be replaced by a new peak-time X12 service and off-peak by the No 12.
The changes are due to come into force at the beginning of March and any fare changes would happen then too.
Mr Craig said: “We’ve still got one or two final decisions with regard to tweaking some fares. We will announce in the next few weeks if there are to be any change in fare levels.
“The decision to alter fares is not one we take lightly. We are a low-fare operator and we will cling to that going forward, but it is becoming more and more difficult to maintain fare levels.”
A source said the company was planning to increase the single adult fare from £1.30 to £1.40 and the day ticket for unlimited travel from £3.20 to £3.40.
City council transport convener Gordon Mackenzie said: “I have no doubt the changes to the BSOG will have an impact on services and fares. You cannot take such a large amount of money out without having an impact, even on well-managed operators like Lothian Buses.”
He said many of the service changes were mitigated by complementary changes to parallel routes. “Lothian Buses has worked very hard to minimise adverse effects for passengers.”
Labour transport spokeswoman Lesley Hinds said Lothian Buses faced a “double whammy” from the grant cut and the tram works. She said: “There is a concern Lothian Buses will consider fare increases. I would urge them not to do that.”
She said the city council should look at ways of offering Lothian Buses support, including not taking the full annual dividend due to the authority.
George Mair, director of the Confederation of Passenger Transport in Scotland, which represents bus operators, said: “The industry understands these are difficult times but the speed and depth of the cuts here are quite spectacular.”
Transport Minister Keith Brown said changes to the BSOG would encourage fuel economy and secure rural services.