TOWN halls were promised more say over local bus services yesterday – but ministers were immediately accused of favouring some parts of the region over others.

The Department for Transport (Dft) announced plans to hand a grant crucial to keeping services running directly to local authorities, instead of to private bus operators.

Transport Minister Norman Baker said the switch would allow funding decisions to be made “at a local level, by people who know most about the needs of their communities”.

At stake is about £360m a year distributed through the Bus Service Operators’ Grant (BSOG), although that sum was, controversially, slashed by 20 per cent this year.

However, Mr Baker announced that only councils deemed by the Dft to be “better bus areas” would be able grab the cash.

Those areas include York and Tyne and Wear – but not County Durham, North Yorkshire or any of the local authorities in the Tees Valley .

In other areas, only the minority of funds for “tendered”

bus services – those requiring a separate council subsidy, because the operator has said they are otherwise not commercially viable – will be devolved.

It emerged that only councils which had proved they were capable of spending the money “effectively” would enjoy full control of the grant.

A Dft source said: “Better bus areas are where the local transport authorities have already demonstrated that they can use BSOG effectively to increase bus patronage, in partnership with bus operators, driving economic growth.”

Durham County Council said it estimated that only ten per cent of about £4m of BSOG allocated to bus services in the county would come under its wing.

In a report published this week, the all-party transport select committee said the plan went only “some way to meeting the requests for bus grants and subsidies to be devolved to local authorities, away from the bus operators”.

And pteg, the body representing the six largest urban transport authorities, warned it would discriminate, adding: “Decisions over how local bus subsidies are allocated are best made locally.”

But Mr Baker, announcing a consultation on the change, said he was determined to make funding “fair and fit for the future”, adding: “As BSOG is paid on the basis of fuel consumed, it is poorly targeted.”

The switch comes amid growing anger over claims that private bus bosses are betraying passengers, while making multi-million pound profits.

Vital services in the Darlington area were lost after the cash-strapped council was forced to scrap a subsidy paid to the bus firm Arriva.

A triple whammy of cuts to town hall funding, cuts to bus grants and concessionary fare schemes threaten passengers with a bleak future of huge fare hikes and disappearing services.