WORKERS at Edinburgh's publicly-owned bus company have hit out at plans to plough the operator's profits into a £145 million extension of the capital's tram network at a time when the council is seeking to make 2,000 post redundant.

Members of Edinburgh City Council are set to vote tomorrow[Thu] on a proposed three-mile extension of the tram route from the city centre to Leith and Newhaven.

The project is forecast to cost £145m, with a report published today urging councillors to authorise the redistribution of at least £25m revenues from Lothian Buses to help fund the extension.

However, Unite, the union which represents staff at Lothian Buses, has criticised the proposal and warned that it could threaten the future of the city's taxpayer-owned bus service.

Unite Deputy Scottish Secretary Mary Alexander said: “Our members are clear that Lothian Buses’ profits should not be plundered to pay for the trams but this report has set alarm bells ringing and there is real anger in the depots.

“If enacted these proposals would effectively signal the cut and gut of investment and jobs at Lothian Buses and our members fear this would also leave the operator more vulnerable to private sector advances in future.

“Furthermore, it seems totally inappropriate to spend nearly £145 million on extending the trams when City of Edinburgh (CEC) is pursuing 2,000 compulsory redundancies across other services in order to make £141 million worth of savings.

“Unite will meet again with council leaders over the next week and we will repeat our call for a collaborative response to the funding crisis but our immediate message to councillors ahead of Thursday's business is to park proposals for a tram extension at this time.”

The outline business case for extending the tram line to Newhaven estimates that extending the route would yield "a net economic benefit to the city", with a return on investment of around £1.52 per £1.

It would also deliver "a range of wider benefits in relation to employment, population growth, social inclusion and economic regeneration", according to the business case.

The move is backed by the Scottish Council for Development and Industry (SCDI) and sustainable transport campaigners including Transform Scotland, but has split the council's ruling Labour-SNP coalition with Labour leaders in support and SNP leaders less convinced of the economic case.

A spokeswoman for Edinburgh City Council said that the council will work with Lothian Buses ensure that the bus company is not adversely affected.

Council leader Andrew Burns said: “As majority shareholder of Lothian Buses, the Council does of course seek to secure the best long-term interests of the company.

"Therefore, prior to moving to the next stage of the tram project, it is our intention to formally clarify with Lothian Buses details of any impacts such an extraordinary dividend would make on its outputs, ensuring complete clarity with regard to project finances.

"That clarification will form part of the next tram report to Council in December.”