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Operators and councils get to grips with Covid-19 bus grant

Buses

Andrew Forster
18 April 2020
 

The DfT has written to local authorities and bus operators in England (outside London) explaining how the £166.8m of emergency funding for the bus industry will be distributed. 

The Covid-19 Bus Services Support Grant (CBSSG) will fund the reduced bus networks operating across the country during the movement restrictions imposed by the Government to slow the spread of the virus. 

The 12-week grant is capped at £166.8m. The majority is being paid to bus operators (‘Commercial CBSSG’) but £21.5m will go to local authorities to cover revenue shortfalls on supported services. 

The DfT believes the operator payments should be sufficient to deliver up to 50 per cent of scheduled commercial mileage. 

“If a local transport authority and operator jointly agree that capacity to provide a service level of less than 40 per cent of scheduled commercial mileage is required, a joint letter justifying this position from the authority and relevant operators must be sent to the DfT,” explains Catriona Henderson, deputy director of the Department’s buses and taxis division. “Operators will still receive CBSSG under these circumstances.”

Henderson reminds operators that a condition of the grant is that they accept English National Concessionary Travel Scheme passes before the statutory start time of 9.30am on weekdays and “on the basis that local transport authorities maintain concessionary travel reimbursement at pre-COVID levels”. 

The first four-week payments to operators will be based on the following three-step formula: 

  • 2017/18 commercial BSOG live kms / 52 multiplied by 4
  • multiplied by the percentage of the service level operated
  • multiplied by £1.0051 (this being the CBSSG rate per km).

From the second four-week period, payments will be adjusted to reflect the actual level of service each operator provides, removing the 2017/18 historic data from the formula. 

The CBSSG payment rate of £1.0051/km will also be adjusted in the second four-week payment by comparing patronage in that month against average patronage before COVID-19. The first monthly payment assumes patronage and fare receipt revenue is 5 per cent of pre-outbreak levels. 

Operators will be able to request a review of their grant payment if they believe it is at least 20 per cent less than the level required to provide the required level of sufficient capacity, “and that this will likely lead to the operator entering financial distress”.

Operators “will not be permitted to achieve an operational margin through CBSSG funding”.

They must supply the DfT with extensive data and participate in an “open-book reconciliation exercise”.   

The three-month grant will be reviewed at monthly intervals to ensure it aligns with the Government’s policy on movement  restrictions.

Local transport authorities will receive monthly payments of their share of the grant. Individual authority allocations have been calculated based on historic supported service mileage, with a top-up for rural areas.

The DfT is paying Transport for Greater Manchester both forms of CBSSG because it already handles all Bus Service Operator Grant payments under the devolution agreement struck with the Government. TfGM’s share of commercial CBSSG will be £3.3m for the first four weeks. 

CBSSG comes on top of the DfT continuing to pay Bus Service Operators Grant on the basis of estimated service levels before the virus outbreak. 

The DfT has also requested that councils continue to pay operators for tendered services, concessionary fares reimbursement and home-to-school transport at the levels before the virus affected service provision and patronage (LTT 03 Apr). 

 
 
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