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Uncertainty in bus sector continue as end of funding nears

Rhodri Clark
25 April 2023

Bus operators are preparing service cuts and consultation on redundancies as governments call time on Covid-era emergency support. Bus managers have drawn comparisons with governments’ sustained funding for the rail sector, which accounts for a much smaller proportion of public transport journeys than bus.

The situation in Scotland may be a sign of things to come in Wales and in England outside the main conurbations. Scotland’s emergency support, latterly named Network Support Grant Plus (NSG+), ended on 31 March. McGill’s, one of Scotland’s largest independents, will withdraw at least 10% of its services in its western heartlands on 1 May. A raft of service changes, including complete withdrawal of Sunday services on four routes, will be implemented on 8 May at its Eastern Scottish company.

McGill’s said that not only were passenger journeys at 80% to 90% of pre-pandemic levels, but also operating costs had “risen exponentially”. Its network revisions include diversions to cover some of the gaps left by withdrawals.

Sandy and James Easdale, the billionaire brothers who own McGill’s, have criticised the Scottish Government’s prioritisation of transport funding. Sandy Easdale said the cost of the rail network in a country with 42% of the UK landmass but under 9% of the population was “disproportionately high”. ScotRail’s subsidy was “now coming into sharp focus, given the hard times that bus users are going through”.

Ralph Roberts, who is chief executive of McGill’s as well as president of industry body CPT, said the Scottish Government covered 7% of bus operating costs compared with 80% of rail operating costs. He claimed the £1.5bn rail subsidy related to 20% of public transport use, while there was only £55m of direct subsidy for buses, which accounted for 75% of public transport use.

However, the end of NSG+ is partially compensated for by the free bus travel scheme for under-22s which was introduced last year. “We now have free bus travel for more than two million people: those who are under 22, people with disabilities and those over the age of 60,” new First Minister Humza Yousaf told MSPs on 18 April.

The UK Government has not introduced free travel in England for under-22s but is currently funding a £2 maximum single fare on many routes until 30 June. The Bus Recovery Grant (BRG) is also due to end on that day.

English local authorities are hard pressed to maintain existing bus support, without taking on new commitments if more services become unviable with the ending of BRG. Thurrock and Slough councils are withdrawing almost all of their bus subsidies to help meet savings targets.

Robert Holden, the DfT’s buses minister, recently told a CPT conference that the DfT was working with the Treasury and other colleagues on longer-term funding. He admitted that “sometimes it feels like a battle” and urged the industry to lobby local MPs. Some attendees regarded the Treasury’s involvement as a glimmer of hope.

The Welsh Bus Emergency Scheme (BES) has been extended by three weeks to 24 July to prevent the loss of home to school services which would have occurred before the end of the academic year had the BES finished in June, as previously planned. This is because in many areas of Wales, particularly rural ones, public and schools services have to share resources to prevent operating costs being prohibitive. The other side of the coin is that post-BES withdrawals of scheduled bus services would increase the cost to local authorities of schools contracts, which are statutory requirements.

Bev Fowles, vice-chair of the Coach and Bus Association Cymru, said one of the largest operators in Wales was preparing for consultation with unions on the job losses which will be needed if the BES is not continued or replaced. At his own Swansea-based company, 70% of the scheduled bus services would no longer be viable.

“I get that if Welsh Government haven’t got the money they can’t manufacture it,” said Fowles. “But I would query why buses are the poor relation when about 77% of public transport journeys are by bus and only about 21% by train.”

Transport for Wales Rail restored its full pre-Covid timetables in May 2022 and also operates a new hourly train service between Crosskeys and Newport. It is also committed to introducing all of the frequency enhancements and new services contained in the 2018 Wales & Borders franchise agreement, albeit later than originally planned.

The sustained nature of rail funding across Great Britain contrasts with the series of short term funding awards for bus operation. The uncertainty is affecting the pace at which pollutants and carbon emissions from the bus fleet are reduced. Some operators are unable to invest in new buses unless they are sure of getting many years’ use from the vehicles, while Arriva – one of Britain’s largest bus operators – has pulled out of schemes to introduce electric buses to Stevenage and Milton Keynes.

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