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New £254m grant to restore bus services back to normal

Talks continue between the bus industry and the Scottish and Welsh Governments about a funding package to pay for increased service levels as their lockdown restrictions are eased. Financial consultant Deloitte is advising the Scottish Government on its scheme.

Andrew Forster
01 June 2020
 

The DfT this week announced a £254m 12-week fund to restore bus services in England outside London to normal as Covid-19 restrictions are eased. 

The Covid-19 Bus Service Support Grant Restart (CBSSG Restart) funding will cover the losses that operators incur by restoring normal services at a time when passenger demand remains depressed because of social distancing, which has reduced vehicle capacity, and the Government’s advice that people should continue avoiding public transport if possible. 

CBSSG Restart succeeds the initial £166.8m 12-week CBSSG grant that has paid operators to provide 40-50 per cent of normal service mileage. 

CBSSG ends on 8 June and  CBSSG Restart is backdated to take effect on 12 May. The two grants will operate side-by-side during this overlap period. 

Alongside the new grant, the DfT will continue to pay operators Bus Service Operator Grant at pre-pandemic levels. It has asked local authorities to continue to pay concessionary travel reimbursement, home-to-school transport, and tendered service contract payments at pre-pandemic levels too. This request is controversial because councils are themselves cash-strapped by Covid-19 (see pages 6-7). 

Although CBSSG Restart is  initially to run for 12 weeks, it has no definite end date, reflecting the uncertainty about how for long Covid-19 will affect travel behaviour.

“It has a rolling quality to it that is really helpful,” one operator told LTT. “Cliff edges are not helpful to anybody.”

The DfT and Treasury will review the grant at the end of each four-week period to assess its perfomance. 

The DfT wants operators to ultimately run 100 per cent of scheduled commercial mileage for a typical non-school week. But the CBSSG Restart grant formula is structured in a way that recognises this will take time to deliver.  

The DfT says operators “must consult and agree with the relevant local transport authorities regarding the services that should be provided” and “take all reasonable steps to respond and comply promptly with reasonable requests from local transport authorities”. 

“Where the DfT has a reasonable belief that an operator has not engaged in good faith with the relevant local transport authorities covered by their operations, the DfT may deny or suspend any CBSSG Restart funding to that operator.”

The DfT will provide funding on the assumption that operators provide up to 70 per cent of service levels by 1 June 2020 and up to 100 per cent as soon as reasonably possible after that. 

For the first four week period (from 12 May onwards), payments will be based on the  formula below, where £1.0051/km is the initial CBSSG Restart rate and a 55 per cent service level is assumed (operators running service levels higher than 55 per cent will be paid at the actual service level they are providing). 

The formula is: 2019 commercial live kms × (55%) × £1.0051

For the period from 9 June to 6 July the service level will be set at 80 per cent to reflect the expected continued ramp up in services. 

Payments for the third four-week period and any subsequent periods will be based on “live” bus kilometres and patronage (excluding concessionary passengers) data for the previous period.

Like with CBSSG, operators will not be permitted to achieve any profit before tax through, or whilst in receipt of, CBSSG Restart funding, says the DfT. This will be ensured primarily by the reconciliation exercise.

The DfT will decide in June how funding for tendered services will be distributed through the CBSSG Restart scheme. Under CBSSG, the DfT paid £21.5m of the £166.8m to councils for  shortfalls on tendered services. There are some concerns about the fairness of the allocation process and also whether operators have received payments due from this grant stream.

Operators will not be permitted to implement commercial fare price increases while receiving the CBSSG Restart funding, or in the four weeks following the conclusion of the scheme.

As well as paying for higher service levels, CBSSG Restart includes provision for one-off operator payments to remove staff from the furlough system early; personal protective equipment costs; costs involved in bringing buses out of Statutory Off Road Notification (SORN); and the cost of parts required to make buses fit for service again.

£29m aid for light rail 

The DfT has announced £29m for operators of light rail and metro systems in England to pay for enhanced services during the restart period as Covid-19 restrictions are eased. 

Nexus, the Tyne and Wear PTE, has secured £7.6m and said the funding will sustain services until August. Chief operating officer Martin Kearney said: “We will continue to talk to the Government about the need for additional financial support for the remainder of the year at the very least.”

Transport for Greater Manchester is understood to have been awarded the largest share – £13.3m for the Metrolink system.

 
 
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