Newport Bus 'crisis' as financial problems delay accounts

Financial difficulties at Newport's council-owned bus operator have delayed its annual accounts, while the company has also undergone a major overhaul of its board of directors, BBC Wales has learned.

Newport Transport missed the deadline to file accounts for the year ending March 2025, and faced compulsory strike-off action by Companies House before the process was suspended earlier this week.

Its latest accounts have yet to be filed and opposition councillors have called the situation a "crisis" and demanded "transparency" from Newport council, its only shareholder.

The council said it was "fully aware of the financial challenges". Newport Transport has not responded to requests for comment.

Earlier this month, councillors approved the replacement of five Newport Transport directors with a new group of board members as the company seeks to navigate what the council has described as "significant" change.

The late accounts are linked to wider financial pressures facing the bus operator, which operates the Newport Bus brand in south-east Wales.

Until now, Newport Transport had attributed the missed deadline to delays in preparing its accounts.

However, Newport City Council has now said the delay was linked to financial challenges facing the company which affected both preparation of the accounts and the audit process.

Companies House also began action to strike it off the register of trading businesses earlier this month, after the company failed to submit its accounts by the statutory deadline.

At the time, Newport Transport said there had been delays in preparing its accounts and that they were being finalised.

The company remains active on the Companies House register, although no new accounts have been published.

A bus depot owned by Newport Transport is being sold to Transport for Wales (TfW) for £3.25m but Newport council would not confirm if that money would help support the bus operator's financial position.

TfW referred the BBC to the Welsh government, which said discussions about the bus depot were ongoing.

It added the "financial position of Newport Transport is a matter for them and their shareholder, Newport City Council".

"This is a crisis," said councillor William Routley, the deputy leader of the opposition Conservative group on Newport City Council.

Routley said he was "absolutely shocked" that the company had yet to file its accounts.

"Because there hasn't been full disclosure, because we haven't seen what state the company's accounts are in, we are asking for transparency on this," he added.

Routley said councillors deserved to see "the actual balance sheet, liabilities, debt and audit standards" in order for them to "support the direction that needs to be taken" by Newport Transport.

Despite reporting a profit in the year to March 2024, the company remained dependent on millions of pounds of government support.

The most recent publicly available accounts showed a pre-tax profit of £884,000.

However, the company relied on a Welsh government grant of more than £7.3m during the year.

Directors said the funding helped bridge the gap caused by reduced passenger numbers following the Covid pandemic.

Those accounts also contained a warning that management figures reviewed later in 2024 showed losses of around £2.3m.

Directors attributed that to the transition away from Covid-era support schemes and a reliance on agency drivers.

Separately, councillors have approved plans for Newport Transport to sell its Corporation Road depot to Transport for Wales for £3.25m and lease it back while continuing to operate from the site.

The council has described the deal as a strategic step ahead of the Welsh government's planned bus franchising model, under which responsibility for planning local bus services would move to TfW.

Under the proposed arrangement, Newport Transport would receive a rent-free first year before paying annual rent of just over £303,000.

The company would also have the right to buy the depot back if the franchising programme does not proceed.

At the same meeting, the council approved significant changes to the company's board, replacing five directors with a new group of appointees.

A cabinet report said the changes would strengthen governance and oversight during a period of "significant regulatory and strategic change".

A spokesperson for Newport City Council said: "The council is fully aware of the financial challenges facing Newport Transport, which have contributed to delays in the preparation and audit of the company's 2024-25 accounts.

"We have worked with Transport for Wales to progress the sale and leaseback of the bus depot, as set out in the public cabinet report.

"The purchase of the Newport depot is a strategic property acquisition that will help enable franchising in south-east Wales, secures strategically important infrastructure, and supports network continuity."

The council did not say whether the proposed depot transaction would assist the company in filing its overdue accounts.

Newport Transport did not respond to requests for comment.