Agenda item

A report was considered which sought endorsement from the Transport Board to submit the 2020/21 South Yorkshire Transport Revenue Budget to the MCA for approval.

The paper presented the proposed 2020/21 budget (which comprised the net expenditure of SYPTE and the transport related costs managed directly by the Mayoral Combined Authority) and set out some of the current and future challenges.

The Board was informed that during consultation with local authority leaders, the possibility of leaving the Levy at 2019/20 level was discussed.  Three options for that funding, not included within the detailed budget, were identified within the report.  Members of the Transport Board were asked to consider which of the options should be recommended to the MCA for approval.

Members were reminded that since April 2010, the annual levy had been reduced by £40.3m (42.5%) in the context of significant budget challenges faced by the constituent Authorities.  To achieve the levy reductions, SYPTE had cut costs and was now a smaller organisation in both scale and scope of activity.

Over the same period, patronage on bus and trams had faced steady decline.  Operators had been responding by cutting services along unprofitable routes and seeking greater reimbursement rates for concessionary fares.  This had inevitably put greater pressure on the bus tendered services budget.  Further uncertainty had been created when First Group was put up for sale.

A summary of the draft 2020/21 Budget compared to the current year budget was provided at Appendix A and identified the changes between years.

The report detailed the major changes, the impact on the budget and the ongoing challenges to future SYPTE budgets.  These included:

·         ENCT concessions

·         Child concessions

·         Tendered services

With regard to the medium-term outlook, Members were informed that 2020/21 was the final year of the current Medium Term Financial Strategy.  The implementation of the planned levy reduction of 2% on each authority was detailed within the report.

It was noted that work needed to start early in 2020 to develop the strategy for the next 5 years recognising the increasing pressures on the SYPTE revenue budget and demands of bus service provision.

Members were reminded that a Levy Reduction Reserve was created several years ago to help manage the transition to a balanced budget position through peak debt periods.

Appendix B included forecasts for the next 5 years, which were indicative and subject to further work.  The assumptions used were based on what was the current scenario for SYPTE expenditure in the future without the impact of the challenges described above.  If the strategy was to reduce in 2020/21 with no further increases then, even with this favourable outlook, the Levy Reserve would be completely utilised by 2024.

The Board discussed the situation in detail, noting that all the local authorities were sighted on the issues, which were still under consideration, and had slightly differing opinions on the proposals.

In answer to a question from a Member, S Edwards reported that First Group had sought to delay the sale process.  They were running a trial system in Glasgow which specifically worked on the timetable schedule and had seemed to show significant improvements and was beneficial financially.  If successful, this could have a material financial impact across the whole group.

Although recognising that the question was not significant for the Board or the agenda item, Cllr Furness questioned why, after work had been completed, there was no shelter and no seating at the bus stop outside H & M in Sheffield.

Action:  S Edwards to provide an answer to the above question.

RESOLVED – That the Board:

(i)      Note the South Yorkshire Transport Revenue Budget Report.

(ii)    Had discussed the recommendation to retain the Levy at 2019/20 levels but had not taken a view on this and referred the matter to the MCA.

(iii)    Had considered the three options presented on how to use the funding, but had not taken a view and referred the matter to the MCA.