asked the Secretary of State for Transport what arrangements he proposes in respect of the liabilities for redundancy compensation which may fall on the passenger transport executives and district councils for their bus operations during 1986–87.
I am aware of the particular problems which the PTEs and those shire districts with municipal bus companies face in ensuring that their bus operations are in a position to be formed into companies by October 26 according to the statutory timetable under the Transport Act 1985. Where redundancies are involved, calculations of costs will have been made on the assumption that redundancy rebate would be payable until 31 October 1986: in the case of the PTEs calculations on this assumption were also made before determining in February this year the maximum precept which might be levied by the passenger transport authorities. However, the Government have announced that abolition of this rebate will take effect from 1 August. Accordingly, my Department has today written to all PTEs and to those shire districts with municipal bus companies, undertaking to reimburse them for additional costs resulting specifically from the effects which bringing forward the abolition of the redundancy rebate will have on the special circumstances of their bus operations. I understand that my right hon. Friends the Secretaries of State for Scotland and Wales will be giving similar undertakings to authorities in their areas.