Metro fares review is put on hold until April 2021

A Metro train
5 November 2020

A decision on Metro fares in 2021 has been put on hold to allow for further talks with the Government over a Recovery Plan for the network.

The annual fare review has been deferred so that Metro operator, Nexus, has more time to develop and agree a Recovery Plan with the Department for Transport, which will include an agreed approach to future fare changes.

The fare proposals for Metro and the Shields Ferry will now be heard on 19 January, with any proposed changes not taking effect until 1 April, councillors agreed today, Thursday 5 November.

Chief Operating Officer at Nexus, Martin Kearney, said: “Changes to Metro and Ferry fares in 2021 are on hold while we take more time to develop a detailed Recovery Plan with the Government.

“This means that all fares will remain as they are until 1 April next year.

“Our revenue and patronage have been hit hard by the Covid-19 crisis and since March we have received financial support packages from the Government totalling £33m. It is vital funding which allows us keep Metro running for people who rely on these services.“

"As part of the emergency funding deal we are required to agree a Recovery Plan with the DfT that will strive to improve our financial position at this time crisis. Changes to fares in 2021 will form part of this process.

“We will keep our customers fully informed about this process and what fares changes are recommended well in advance of April next year.”

Today’s decision was taken by the North Joint Transport Committee, Tyne and Wear Sub-Committee.
Nexus carries out a review of its fares annually to ensure that the income generated matches the rising costs of providing these services.

Metro is subsidised by an operating grant from Government and Nexus seeks to meet almost all of Metro’s operating cost through a combination of fares revenue and this subsidy.

A fares proposal arising from this review would normally be presented to the November meeting of the sub-committee, with changes taking effect from the start of the following January.

This year, however, Nexus is in ongoing talks with the Department for Transport to agree a Recovery Plan for Metro as a condition of receiving the emergency funding, known as Light Rail Revenue Restart Grant (LRRRG), to reflect the fact that fare income from passengers has been significantly lower than normal as a result of Covid-19 restrictions.

Nexus is in receipt of £33.3m of additional funding for Metro from the Department for Transport covering the period from 17 March 2020 to 18 January 2021, with a further £7.8m contingent on ministerial approval on 11 January 2021.

This funding for Metro is provided on the condition that Nexus works closely with the DfT to identify measures, such as those associated with fare changes, to improve the financial position of Metro.

As a result, Nexus is required to work with the DfT to develop recovery plans by the end of December 2020.

The fares proposal for 2021, informed by projections for likely patronage for the year ahead, will form one element of the recovery plan.

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