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Eastbourne & Willingdon Lib Dems

Eastbourne Buses - what really happened

December 18, 2008 4:39 PM

Eastbourne BusesWith the sale of Eastboune Buses now complete (Thursday, 18th December), Councillors are now able to say what really happened in the lead up to this event.

Until now members of the council had been bound by strict confidentiality agreements, which prevented them from speaking out or making comment. With the completion of the sale, these restrictions have been removed.

Councillor Troy Tester, Deputy Leader of the council, said "No one wanted to sell Eastbourne Buses but it became the only way to guarantee future bus services in the town."

"The prospect of local people waking up one day to find there were no buses running was becoming a real possibility. It was unlikely the company could have survived until Christmas without the support of a national bus operator."

"We can now reveal that Eastbourne Buses came within hours of having to close once before. In April 2007, when the previous Conservative-led Council chaired the bus company, Eastbourne Buses couldn't afford to pay for more fuel. It was only saved by an eleventh hour unsecured personal loan of £150,000 from an Executive Director. The Conservative-led Council failed to support Eastbourne Buses at any way during that awful time."

When the Liberal Democrats took control of the Town Hall following May 2007's local elections, the new administration supported the bus company in their bid for increased borrowing. This enabled it to repay the £150,000 loan and continue trading. The operating loss for the past financial year was less than in the final two years of Conservative control of the Council but Eastbourne Buses just could not continue to trade at a loss."

Lib Dem-run Eastbourne Borough Council can confirm that it received two bids from rival bus operators to buy Eastbourne Buses. The first bid was from Stagecoach, for £4.05million and the second bid came from another operator for £2.85million. As a result, there was no close competition between the bidders.

Cllr. Troy Tester added, "With a £1.2million difference in the bids, the Council would have been doing a disservice to local taxpayers had it not gone with the Stagecoach offer. Stagecoach also guaranteed job and salary security for the operational staff at Eastbourne buses for a period of two years. In addition, they have also promised a fleet of at least 12 new buses, to enter service in January 2009. Unfortunately, no such guarantees were offered by the other bidder. In fact, the lower bid would have failed to even cover the large pension liability of the company."

"If the council had chosen to accept the lower bid there would have been serious consequences. The sale would have been unlikely to have been signed off by the Secretary of State. Also, the council's own auditors would have challenged the decision and other legal challenges could have followed."

"Worse still, all of the objections would have involved significant costs to the local council tax payer and caused significant delays in any transfer happening. Any delay could have seen the company placed into receivership with the loss of bus services and jobs before Christmas. The council would also have been responsible for all of the company's debts. The minority shareholder company, Keolis, which owned 20% of the company, had also indicated that it was unwilling to agree to a sale in which it would receive nothing for its investment, which would have happened if the lower bid had been accepted. Both Keolis and Eastbourne Borough Council needed the agreement of each other to sell their shares and neither bidder was willing to buy less than 100% of the company."

The sale of Eastbourne Buses was agreed at a special Cabinet meeting held on Tuesday 18th November and was chaired by Councillor Troy Tester, who invited Conservative Councillors to speak and ask questions at the meeting. Three conservative councillors took up this offer, including Conservative group leader Cllr. David Elkin. At no point did the Conservative Leader ask the cabinet to consider taking the lower bid but instead said that, with such a price difference, there was "no choice". This is at considerable odds to comments later quoted in the press.

Information relating the sale and the circumstances leading up to the sale are being made public as a result of a recommendation introduced by Cllr Tester to the council's cabinet to do so at the earliest possible opportunity.

Cllr Tester said "I felt it was only right that this information should be made public as soon as it was legal to do so. It's a real concern that Eastbourne's MP Nigel Waterson has apparently failed to understand why such negotiations have to be conducted in private. No operator would have been willing to even talk to us if they could not have been sure of confidentiality throughout. For a man who is a solicitor and wants to be in government I find it hard to believe that he does not understand this. I can only conclude that he was happy to place the jobs of the staff at Eastbourne Buses and its future in jeopardy to support his own political aspirations."