PLANS to bring Tyne and Wear buses back under public control are in tatters this morning after they were judged to be unworkable.

Inspectors concluded that Nexus had failed to consult properly ahead of launching the Tyne and Wear Quality Contract Scheme.

The Quality Contract Scheme (QCS) board also found that the scheme did not demonstrate that it would lead to more passengers or that service quality improve.

- Bus regulation scheme taken to next stage.

Members of the North East Combined Authority (NECA) voted in favour of introducing a quality contracts scheme which it claimed could give a £272 million economic boost to the region over the next decade.

Metro operator Nexus, which was behind the plans, said the changes would lead to reduced fares, better services, less road congestion and a reduction and freezing of the subsidies that now go to the private bus companies.

But the board found that:

· Nexus failed to comply with the statutory requirements on consultation

· The proposed scheme cannot demonstrate that it would increase use of bus services because its affordability is not demonstrated · Service quality would improve

· The proposed scheme would contribute to the implementation of the local transport policies

· The proposed scheme does not provide value for money

· The proposed scheme imposes disproportionate adverse effects on operators

The  QCS board, which is chaired by Traffic Commissioner for the North East of  England,  Kevin  Rooney,  was  asked  to  examine  the proposed Quality Contract Scheme in October 2014.

The board held oral evidence hearings into the proposed scheme in July this year.

The report notes: “This is the first time  that  the 15-year-old legislation supporting Quality Contract Schemes has been put to the test. It seems to us, that the legislators probably had in mind that it would be tested in a rather smaller scale first.

“By its very nature, everything that Nexus was trying to assess was a novel intervention. There was little, if any, truly relevant research for them to draw upon. It is the board’s view that they have done exceptionally well to get  where  they  have  got to today. It is always far easier to criticise, than to create.

“In the Voluntary Partnership Agreement, Nexus can be proud that it has led three  bus  companies to put forward a proposal that is in itself novel and groundbreaking,  with  the  makings  of  potentially  effective  governance allowing local citizens real influence over their bus services.”

The report was welcomed by bus firm Stagecoach.

The company said in a statement: "Stagecoach believes the decision has clear implications for bus franchising powers linked to the government’s devolution programme.

"The forthcoming Buses Bill must provide a legislative framework for enhanced partnerships, and ensure any franchising proposals are subject to proper safeguards and a transparent public interest test."

But Tobyn Hughes, managing director of Nexus, said the company disagreed with the board.

He added: "We are extremely disappointed. We want to introduce a simple, affordable and integrated public transport system in this area, and the Board recognises our proposal could achieve this.  It should not be this difficult.

“The Board's opinion is that we should not go ahead largely because we are not providing compensation to bus companies for profits they may lose in the future, and the Board has taken a negative view of our proposal as a result.

“We simply disagree with many of the Board's conclusions, and we will be discussing next steps with the North East Combined Authority.”