Major shake up as FACT, HACT and ESACT signal end of commercial ambitions and will revert to exclusively community provision only -
PUBLISHED: 12:44 27 March 2019 | UPDATED: 12:49 27 March 2019
Transport provider FACT has thrown in the towel and will scrap its commercial arm and revert back to community buses only.
It could mean job losses or more likely, if agreement can be reached, selling on the commercial fleet and transferring the drivers to a new employer.
Staff across Fenland, Huntingdonshire and East Cambridgeshire will all be affected by today’s news.
Gary Christy, the new chairman of the FACT board, said: “It is very unfortunate that we find ourselves in this position, but this change is necessary if we are to be able to focus on the needs of those for whom true community transport is a necessity not an alternative.”
Talks have already taken place with taxi and coach operators to see if any would be interested in buying the large number of mini buses that will now become available.
Ironically, of course, it was the Cambridgeshire Bus Coach and Taxi Association that complained for years of illegal practices by FACT and which culminated, eventually, in a £200,000 auditors’ report by the county council that confirmed their allegations.
Faced with repaying hundreds of thousands of pounds back to Cambridgeshire County Council for illegally obtained funding, the new board at FACT – the Fenland Association for Community Transport – has swept aside its predecessors’ ambitions.
Mr Christy put it bluntly today when he accepted once again that not-for-profit FACT and its subsidiaries in Ely and Huntingdon had wrongly “been subsidising commercial contracts”.
The county council is now preparing to ask FACT to repay some if not all of that money.
A report to the council’s audit committee this week says the amount owed is being finalised and they were “calculating any competitive advantage conferred through previous grant awards”. Estimates of the amount due ranges from £480,000 to £1.2 million but these figures have not been made public.
In a statement Mr Christy said: “There have been ongoing discussions regarding state aid grants that had been given to FACT, HACT & ESACT that we have been asked to pay back.
“Steps have been taken as far as possible to resolve these situations, but it has started to show that the commercial business overall is not as profitable as expected when first set up”.
He said that work is taking money, time and resources away from the not-for-profit services “and diverting
these resources away from the community transport aims and objectives”.
Mr Christy said: “As a board we have had to take the decision that FACT, HACT and ESACT will cease to run
licensed PSV operator services and will not be tendering for or renewing any commercial contracts in their current form.
“Being mindful of the security of the services we currently provide and jobs plus the investment that has been made, we have had preliminary discussions with a number of existing commercial operators.
“The talks are to potentially transfer those contracts over under TUPE (Transfer of Undertakings-Protected Employment), to relieve FACT, HACT & ESACT of the financial burden that currently exists”.
Mr Christy said: “These are very early discussions and during these talks all concerned have been extremely
mindful of what this means to all staff.”
Staff have been assured that there are “no immediate changes to how the contracts are being worked and we will keep you informed as things progress.
“We would ask at this stage to refrain from discussing this with your passengers. They will be contacted in due course.”
Following last year’s audit inquiry, county council chief executive Gillian Beasley noted that “whilst the police conclude there is insufficient evidence to merit prosecution, their conclusions do highlight actions by FACT, HACT and ESACT that on the balance of probabilities support a conclusion that false information was created and submitted with an intent to support requests for public funding”.
Taxi drivers’ spokesman Dave Humphrey, whose work led to the audit inquiry, said it was now conclusively proven that FACT “sourced almost a million pounds in grant funding, much of which, through making false claims it was needed to fulfil a non-existent demand; then spent the money buying a commercial fleet”.