NETWORK Warrington – the town’s bus company – is being bailed out to a substantial six figure tune by the council.
Councillors discussed the move behind closed doors at the Town Hall on Monday as the actual sum of the loan has been kept secret.
But the Warrington Guardian understands the figure is well into the hundreds of thousands of pounds.
The move comes as industry insiders point to falling revenues and passenger numbers and increased running costs with fuel bills soaring as a source for hard times for the bus company.
Council leader Clr Terry O’Neill (LAB – Burtonwood and Winwick) said the council could lend the money at a low rate to Network Warrington.
He added: “Most bus companies are seeing passenger numbers dropping off a cliff and are going through difficult times.
“We value a municipal service and we are helping them out.
“They add a lot of value to our town because they run routes that commercial providers would not.
“The services also support those that most need it and supports our priorities to help those in the most deprived areas.”
A spokesman for Network Warrington added: “Municipally owned bus companies, under the 1986 Transport Deregulation Act, can only borrow from their shareholder, ie the council, and not from banks.”
The council had already taken over the deficit of the bus company’s pension scheme from its days when staff were part of the local authority pension.
But there are questions over the secrecy of the details surrounding the loan, which was not discussed in public.
A source said: “If taxpayers money is going to be used it needs to be done in an open way. When are they going to pay back the loan and how?”
But the council say the matter included commercially sensitive material which could not be discussed in public.
The council recently agreed its own budget for 2013 which included £15m of cuts.
It also issued a loan of £200,000 to the struggling Wolves in 2000.