News: All South Yorkshire councils to cover Supertram losses

A transport levy paid by the four local authorities in South Yorkshire is set to be used to cover the £6.3m losses of Supertram after Stagecoach’s current contract for operation of the network ends in March.

Opened in 1994, Sheffield's Supertram system cost £240m and now serves major residential and employment sites in Sheffield. A tram-train pilot project brought new vehicles to Rotherham in 2018. The running of Supertram services, infrastructure and finances will be controlled by South Yorkshire Mayoral Combined Authority (SYMCA) through an arms-length company from March 22.

Rothbiz revealed in November that the cost to keep the Supertram network going for another 30 years is now nearly £600m, with only the first £105.95m secured, and that £7m is being set aside from the MCA budgets to support any operating losses. This is £7m each year, reducing over time.

The Mayoral Combined Authority Board is set to receive an update on the proposals, and budgets, when it meets next week with a business plan for Supertram on the agenda.

A 2024/25 operating budget for SYFTL (the arms-length company operating the tram) shows that operating costs are £23.6m per year for the 29km long network of four overlapping routes, served by 25 trams and seven tram-trains. Nearly 60% of costs go towards the wages and salaries of the workforce with almost 20% of the budget paying for the cost of electricity which powers the trams.

Annual income is £17.5m, which mostly comes from ticket revenues and around £1.8m from concessionary subsidies via SYMCA for elderly and disabled passengers and children.

Around 9.5 million people travel on Supertram every year. A long period of track renewal and the COVID pandemic has seen patronage fall from its peak of 15 million passengers per annum in 2010/11. There were 11.5 million passengers in 2019 prior COVID.

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A report to the SYMCA board said: "All these income streams are not enough to cover the tram system’s day-to-day running costs. In 2024/25, the operating deficit is forecast to be around £6.3m. SYMCA will pay an operating subsidy to SYFTL which will allow the company to meet all its financial obligations. SYMCA will also meet any costs necessarily incurred by SYFTL to deliver the asset renewal programme. In its own medium term financial plan, SYMCA has set aside sufficient resources (£5-7m per annum) from the South Yorkshire Transport Levy (paid by each of the four local authorities in proportion to their population) to cover the cost of the operating subsidy."

This year's transport levy is to be discussed at the same meeting. For 2024/25 it is set at £56.65m, raising an additional £1.1m of funding. The 2% increase would mean that Sheffield Council would pay in £23.6m, Doncaster £12.5m, Rotherham £10.6m and Barnsley £9.9m.

The new company's five year strategy sees Supertram go through a recovery phase before an improvement phase and then a growth phase. The plan forecasts that the operating deficit will decline as energy prices begin to stabilise.

The report adds: "One of SYFTL’s primary goals is to decrease its dependence on the public purse. To achieve this, the delivery plan includes several measures that aim to boost ticket sales and other forms of revenue, as well as identifying more cost effective ways of working. This includes new ticket collection machines which will speed up payments for customers. Efficiency in the business will be targeted with a major Timetable Optimisation Study the results of which will determine future service levels and support efficient running and manning of services."

SYMCA has put in place a two-year emergency support package for local transport in the face of a lack of resources and "stop-start" government funding for buses. The authority states that "without sustained Government funding this level of support cannot be maintained beyond financial year 2024/25."

SYMCA website

Images: Supertram / SYMCA