Answer: The declaration of a dividend to the Council is a matter for the Board of Directors of Newport Transport and, under Company law, they can only pay a dividend to shareholders where there is sufficient profit.
Although dividends have been paid in the past, there have been no dividends paid by Newport Transport to the Council for a number of years because their financial position and level of operating profit has meant that it has not been appropriate for the company to declare any dividends.
Therefore, there is no outstanding dividend, as such, due to the Council. The figure to which you refer was a budget pressure within Streetscene which occurred when the dividends ceased, and this has since been addressed through the Council’s budget management.
I can only repeat what the Managing Director of Newport Transport told the Cabinet in May 2014 – that the company are confident that their financial position will improve, particularly when the new bus station in Friar’s Walk is opened, and they will then be in a position to resume the payment of annual dividends to the Council.
Although the loss of the school transport contract will inevitably have some impact on the company, this is not their main area of business, and we were advised that the main cause of their current financial position was the significant reduction in central government transport support grant for non-commercial bus routes.