The chief executive of bus operator National Express fears he will have to scrap ten per cent of buses on Birmingham’s roads if ministers scrap industry grants.
Dean Finch told councillors on the region’s transport body Centro that ruthless cuts to cash paid by the Department for Transport to operators could be devastating for city services.
Ministers will announce this autumn how they plan to reduce public spending by a massive £6 billion and are considering an end to the bus service operators’ grant.
The £451 million annual sum represents a rebate on fuel duty paid by bus operators and would achieve a large part of the savings in one fell swoop.
Mr Finch warned Centro members: “The spending review could be a serious problem for our industry.
“The feeling throughout the industry is that it would mean a ten per cent reduction in the service that operators are able to run.”
Campaigners have also claimed that passengers could be forced to pay up to seven per cent more for fares if the grant is scrapped.
Birmingham is already reeling from a number of cuts which have left residents in some estates without bus links and Mr Finch faced a grilling from members.
He said that National Express – which almost went bankrupt last year – was forced to stop running less popular services because it could no longer afford to subsidise them.
But Centro members accused Mr Finch of putting profits before passengers.
Coun Keith Linnecor (Lab, Oscott) told him: “You have withdrawn routes and left people stranded. You have reduced the network coverage.”
Mr Finch was also attacked for keeping passengers in the dark over service changes and price hikes on National Express West Midlands buses.
Controversially, “short hop” journey prices jumped by a quarter from £1.20 to £1.50 in June.
Mr Finch said he believed it still represented value for money compared to other major cities and fares could be brought back down or frozen if the company improved its profit margins.