Tolls to rise after Sandbanks Ferry public inquiry ruling

The Sandbanks Ferry company has been given the go ahead by the government to increase the toll for cars from £4.50 to £6.75 by 2031, with a swift rise to £4.75 on Monday 17th May 2021.

Following the decision by the Secretary of State for Transport, Grant Shapps to accept the recommendation of the inspector to allow the ferry company to increase prices, fares will rise for all vehicles incrementally over the next 10 years, although the cost for pedestrians and cyclists will be frozen at £1. The Sandbanks Ferry operates between Studland and Sandbanks in Dorset.

Sandbanks ferry toll charges sign

Virtual public inquiry

A virtual public inquiry into whether the ferry company could increase tolls was held online over three days in January 2021.

At the inquiry, the legal representative for the ferry company argued that the main aim of increasing tolls was to cover the day to day costs including maintenance, to provide a reasonable contribution to the company’s reserve fund and to provide a reasonable return for the company.

The inquiry also heard that the ferry would need to be replaced in 2029-34 and that contributing to the ferry replacement fund would be given priority over dividends for directors. The ferry company also committed to offering a discount on books of tickets for frequent car users.

Ferry Road in Studland

The table below sets out the toll charges for all classes with effect from Monday 17th May 2021

These are the tolls that the inspector has said can be charged by the ferry company from 1st April 2031

“Objectors will be disappointed with my conclusion”

In her report published on Wednesday 12th May 2021, the inspector said:

“I fully appreciate that the increase is viewed by many as inappropriate and that objectors will be disappointed with my conclusion. However, whilst the views of local residents and businesses are very important, they must be balanced against other considerations.”

Sandbanks Ferry

“Our case was compromised by the consortium that included Dorset Council, BCP Council and Swanage Town Council”

Those objecting to the toll price rise include Studland residents, who live close to the ferry and are therefore most adversely impacted by fare increases.

The chair of Studland Parish Council, Nick Boulter led the case at the inquiry for the Studland objectors. Reacting to the news that the ferry company had won its case, he said:

“We are very disappointed that the inspector hasn’t listened to the views of residents. This is going to put up fares a lot and make it very difficult for residents to get to health appointments and commute to work. It is a detailed report but essentially our views have been dismissed.

“We strongly feel that our case was compromised by the consortium that included Dorset Council, BCP Council and Swanage Town Council. I think that Swanage residents, businesses and shopkeepers are going to be very unimpressed with the fare increases for vehicles, which were supported by their town council.

“While the consortium did manage to freeze the tolls for pedestrians and cyclists, this principally benefits those from the BCP side travelling to Studland for a day out.

“For the majority of people in Purbeck, it’s just not feasible to suggest we should walk or cycle to Poole or Bournemouth. All the major employees like the Pig Hotel and the National Trust objected to the fare increases as it will be damaging to their employees and their businesses.

“The current ferry is getting old and there are likely to be more maintenance problems in the future – we need a new ferry much sooner – not in 12 years. We were promised one in 2024 and now it’s 2034. They keep moving the timings. Will the new ferry ever arrive?

“Did the inspector listen to our views? No she didn’t!”

Sandbanks Ferry

“We are pleased that… our application has been approved”

Jason du Toit, General Manager of the Sandbanks Ferry Company, said:

“We are pleased that after much consultation and a public inquiry, our application has been approved. These small incremental increases will allow us to continue to maintain our current vessel, the Bramble Bush Bay, to a high standard whilst allowing the company to set funds aside in the Ferry Replacement Reserve for a new craft in 2032.”

Conclusion and recommendation of the inspector’s report in full

8.1 There is no dispute that a replacement ferry will be required by 2034 (at which time the current ferry will be some 30 years old) or, that to ensure that it is in service by then, an order would need to be placed in 2032.

In 2018, the Secretary of State (SoS) agreed with the significant concerns of Inspector Stone in relation to the proposal before him at that time, namely that there was no assurance as to the date when a replacement ferry might be required; there was no assurance that the Ferry Replacement Reserve (FRR) would be safeguarded or would rise to the levels required to enable a replacement vessel to be obtained; and that the return on investment was not considered reasonable or appropriate given that it was secured ahead of contributions to the FRR and would be maintained at an artificial level that did not reflect the true performance of the Company.

8.2 I consider that those concerns have been fully addressed by the current application and the arrangements now secured.

In particular, the date for replacement of the ferry has been fully justified and accounted for in the forecast profit and loss accounts; the Applicant has now put in place all the provisions it reasonably can to safeguard the FRR for its intended purpose (so far as the Company is able to within the powers of the law) and, based on the forecast profit and loss accounts would be able to obtain a replacement from at least 2023 onwards (if required); the payment of dividends is appropriate in those years where there is a surplus of profits after investment in the FRR has been prioritised, with the return on investment (measured against NAV) being reasonable, at an average of 3.46% over the 12 years.

Accordingly, I consider the proposed increases to be consistent with the statutory framework governing the ferry operation, as set out in s.6 (3) of the 1954 Act, as amended.

8.3 I fully appreciate that the increase is viewed by many as inappropriate and that objectors will be disappointed with my conclusion.

However, whilst the views of local residents and businesses are very important, they must be balanced against other considerations. I have not ignored those views in coming to my conclusion.

I have taken full and careful account of all the representations that have been made, which I have balanced against the provisions of the relevant Acts and other material considerations.

In the overall balance however, for the reasons set out above, the evidence in this case leads me to conclude that the application should succeed.

8.4 I therefore recommend that an Order be made confirming the toll increases proposed, subject to the maximum rates in any year as set out in the attached schedule at Annex C.

Whilst the Applicant maintains that that proviso is not necessary, I consider it to be very necessary for the reasons set out above, otherwise the Company could, if it so wished, introduce the maximum fares (ie the fares before 2032) whenever it chose.

That could, in some years, result in revenue over and above what I consider to be adequate in the terms of the legislation. The view of Mr Dubin, for the Consortium, is that such an approach is lawful. I have no reason to disagree.

In the event that the Secretary of State was to agree with my recommendation, it should be noted that the Applicant adopts Mr Dubin’s submissions.

If the Secretary of State was minded to make the Order in these terms, he may wish to take legal advice to ensure that it is a lawful approach within the terms of the relevant legislation.

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