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The DfT was right to reject UTG’s bus grant power grab

Julian Peddle Ipswich IP8
21 August 2020
City region bus networks: let the operators get on with delivering them, says Julian Peddle
City region bus networks: let the operators get on with delivering them, says Julian Peddle


The Urban Transport Group’s demand that Covid-19 emergency funding for bus operators should be funnelled through its members (‘Covid bus fund: UTG demands a rethink’ LTT 24 Jul), needs to be seen for what it is: a simple power grab and a mechanism to give local authorities control over the assets of private companies. It would lead to a complete halt to investment nationally and the DfT was right to ignore the request (‘DfT to confirm fresh round of bus support’ LTT 07 Aug and see page 5).

The UTG’s proposals are complete fantasy and have clearly been devised by an organisation that has not the first clue about running a transport business, or even an unnecessary transport group. 

The current Covid Bus Service Support Grant (CBSSG) system, whilst not perfect, is in fact very simple to operate and, because of that, money has been channelled to operators swiftly, with reconciliation for the first period now complete. The UTG suggested there will be significant over or underpayments, as indeed there will be, but the DfT’s reconciliation process resolves that easily.

The UTG suggests that the emergency bus grant should instead be based on the cost of operating the pre-Covid bus network, less, say, 20 per cent to cover current fare revenues. Has the UTG not noticed that current bus networks differ from the pre-Covid bus ones? CBSSG tracks the current cost, which is the correct metric.

The UTG suggests that the funding should be allocated to local authority areas according to the number of boarding passengers by each area gleaned from the DfT’s bus statistics. If the UTG had any understanding of the bus industry it might understand how inaccurate those statistics are, which even a cursory review would reveal. 

It next suggests that local transport authorities would work with operators to specify the network. It proposed in July that this should be done by 4 August when the new round of grant funding began. Yet if one looks at Transport for Greater Manchester’s flawed bus franchising proposal, it accepted that in even two or three years time the initial franchises would be based on the current network. 

The UTG’s plan then moves on to fares, which it suggests might be made simpler. Yet look at any metropolitan area and the current proliferation of multiple travelcards and tickets specified by the authorities. It’s the metropolitan transport authorities that love complication. The UTG also suggests that multi-modal day fares might be introduced. Name me any metropolitan area that does not have a range of these now.

The UTG suggests that the DfT’s current system will be most difficult to administer in “complex bus markets”, whatever they are. But as CBSSG is linked to operator licences, it does not matter how complex the market appears to be, reconciliation is fairly simple.

The UTG sees its Covid funding proposals as the first step to franchising, otherwise known as nationalisation without compensation, and the setting up of new municipal bus companies. Municipal bus companies are a nice idea but here we need to look at history. The 1968 Transport Act abolished all the municipals in the metropolitan areas, with the companies absorbed into the new Passenger Transport Executives. The Labour Government thought ‘big was beautiful’, and away went the municipals and local pride. It’s far too late to resurrect that structure and there is not enough competent management to run such organisations. The reduction in the number of remaining municipals in Britain over the last 15 years proves that point.

Finally, the UTG suggests that at the end of the Covid crisis, when we have reached a ‘new normal’, many bus operations will return to the previous commercial operations model. So, after the combined authorities have altered the network probably at a political whim, and reduced fares, commercial operators will have the network handed back to them? How kind. But they might not want it back.

Nowhere in its proposal does the UTG suggest why any of this might lead to a better outcome for passengers, probably because it will not have that outcome.

In these difficult times the UTG might instead choose to promote cooperation with operators rather than confrontation. It clearly believes that unlimited gifts are available from the taxpayer, when in the future that will not be the case. Why create more systems that resemble the London model of bus provision, which has finally collapsed after years of overt political intervention? 

The need for less polluting vehicles will involve significant capital expenditure, which will have to come from the private sector unless yet more borrowing is added to the Government’s debt pile. 

The DfT was right to ignore the UTG’s proposal and to stick with a system that works.

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