Stagecoach boosted by Tyne and Wear bus report

Earlier this year, the transport executive for the authority suggested bus services in the Tyne and Wear region should be franchised through the letting of contracts. The proposed system was intended to replace the current arrangement, in which services are commercially-funded by bus operators.

However, the review board deemed the proposal not fit for purpose, as it failed to meet the required financial and economic conditions.

The review panel said effectiveness of the scheme had been "significantly overstated", indicating there were doubts over whether implementing the proposal would be affordable.

"We welcome the Review Board's confirmation that the core franchising proposal was unaffordable, inflexible, high risk and not in the public interest," said Martin Griffiths, Stagecoach's chief executive.

"We would urge the North East Combined Authority to respect the findings of the Review Board, and put passengers and local people first, by abandoning the misguided franchising plans.”

Sector peer Go-Ahead, also welcomed the decision, adding that its decision to challenge the proposal had been vindicated.

"We are pleased our belief has been validated that working in partnership can bring about a better outcome for both bus passengers and taxpayers," it said in a statement.

Stagecoach shares were up 6.23% to 375.30p at 0910 GMT on Tuesday.