Further explanation was given in an email which was passed to hospital staff:
Following the introduction of the National Concessionary fare scheme in April 2008 Plymouth City Council decided to change the way in which the operators were reimbursed. This led to a significant reduction in the amount that we get paid per customer. Overall, despite carrying more customers on some routes the revenue that we are receiving is less. Services 10, 17, 18 and 48 are these routes. Unfortunately, due to the areas they cover they are never going to carry enough customers to be commercially viable, they are always going to be marginal at best and require some revenue support from the City Council on the basis that they perform a social need. As a result of the reduction in revenue, coupled with increases in costs such as fuel, where the wholesale cost to First has increased by around 50% we could not continue to operate these services at a loss. We therefore entered discussions with the City Council over whether they will be able to offer more revenue support to these services in order for us to keep operating them. Unfortunately they were not able to supply any additional funding even from the concessionary fares pot which has been a contributing factor to this problem. As a result Service 10 will be operated by another bus company after 17th January with a revised timetable, full details can be obtained by from the City Council, and Service 17 between the City, Wingfield Road, Stoke, Keyham, Ham, Crownhill and Derriford Hospital will be withdrawn without a replacement being offered. The Council are obviously fully aware of this situation. We did offer a number of scenarios that would have maintained the socially necessary service but that would require additional funding and unfortunately the funding could not be found. The losses that we were making on these routes were substantial and we could not longer absorb these.
Service 10 has changed hands before…
First have used their Solos on this route: 
And before that Citybus usually ran the service with step entrance Darts 
It remains to be seen what Target Travel use when they take over. Their passengers will be hoping for the pink Solos - anything other than those Marshall things!
824KDV Western National superb night shot on Royal Parade.