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Bus firm's liquidation 'costs council £400k'

Date Added: 01/11/2012  

A county council in the south of England has lost £400,000 due to the liquidation of a local bus firm that transported children to school.

Oxfordshire County Council was forced to sign last-minute contracts with other companies after it was announced that RH Transport was going into liquidation earlier in the month.

According to a report by the Oxford Mail, organisations including Stagecoach were called in by the local authority to run 13 public routes and 30 school services.

County cabinet member for transport Rodney Rose said the council is £400,000 out of pocket as the new contracts it had to agree were more expensive than the deal with RH Transport.

"I suspect a lot of them are companies which were the second choice for the tender in the first place," he said, suggesting RH Transport may have bid too low for the contract initially, which meant it did not have enough money to avoid going into liquidation.

"If you tender too cheap, get all the jobs and can't turn a profit, then you don't survive," said Mr Rose, who defended his decision to use the firm, noting it had been providing services for the local authority for almost ten years before the failure of the company this month.

The council representative praised council officers and other contractors who sorted out temporary contracts for the buses, while adding he was upset at the failure of RH Transport.

"It has cost us a lot of money, but the other option was leaving kids at home while we worked things out," he said.

Chester Festivals - which ran Chester's Summer Music Festival, the city's autumn Literature Festival, GobbleDEEbook and the Chestival summer events programme - recently announced it was going into liquidation, blaming the loss of grants from Arts Council England and Cheshire West and Chester Council for the failure of the organisation, reported the Chester Chronicle.

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