Transport review announced for West Midlands amid £80 million deficit fears
A major transport review is to be launched in the West Midlands amid fears that a budget deficit could rise to nearly £80 million.
The West Midlands Combined Authority (WMCA) has raised concerns over the funding impact of risks to the bus network and the Midland Metro.
The Metro has undergone a calamitous period, with three suspensions in nine months after cracks were found in trams, and the Express & Star has revealed the extension from Wednesbury to Brierley Hill is in jeopardy due to rising costs.
Meanwhile, bus usage has yet to recover from the pandemic.
A new report says that under a best case scenario, the WMCA faces a deficit of £21.7m in 2023/24, rising to £42.7m in 2027/28.
However, "additional pressures" with the Metro and the "risk" associated with the bus network could lead to a worst case scenario.
This would see a deficit of £54.7m next year, rising to £77.8m in five years time, according to the report.
The report, which was presented to the WMCA board, said: "The worst case scenario reflects an estimated £30m annual risk relating to the subsidised bus network.
"In the event commercial bus operators de-register significant elements of the network, WMCA would not be legally obligated to replace those services, but analysis suggests that the impact of this risk crystallising would have a significant social impact."
It adds that Midland Metro Limited (MML) has reported an "increase in operating costs for 2022/23 above the budgeted amount".
This is due to "the unprecedented rise in energy prices" and reduced revenues and grant funding during periods when the line has been suspended.
The report says "savings will need to be found" to manage the hike, adding: "A revised operational subsidy of £8m will be paid to MML for the 22/23 financial year, funded from a combination of the existing budget, savings and the Department for Transport (DfT) Light Transport Fund grant."
Bosses have announced a policy review, set to take place next summer, which will look at how to best manage "transport pressures".
Meanwhile the DfT has confirmed a £4.6m subsidy for the region, made up of £1.9m for bus and £2.7m for the Metro. It has also pledged £13m to ensure a "stable network" during the Commonwealth Games.
The Metro took another hit last month when it emerged the long-delayed extension in Wolverhampton city centre would not be completed in time for the Games.
