From the TUC

Cuts Watch #127: the Bus Service Operators Grant

13 Jul 2010, by in Cuts Watch

Unions, bus companies and consumer groups are increasingly worried that the Department for Transport’s contribution to the Comprehensive Spending Review will include substantial cuts to bus subsidies. The Bus Service Operators Grant provides a rebate of fuel duty for bus operators and if the review of the Grant has a negative outcome there could be serious implications for community transport and rural services.

Norman Baker, the buses minister, has said, “we are in favour of more people using buses. … But the bus industry has to understand that we are looking at every budget line because there is a spending review underway. Nothing is safe.”

The Campaign for Better Transport has worried that there is a real risk that the Grant could be abolished, with such consequences as a 10 per cent increase in fares, a 10 per cent cut in routes and a loss of 10 per cent of jobs in bus services (jobs in bus manufacturers could also be threatened). The routes most likely to be lost would be in rural areas and on evening and weekend services, low-income people would be at greater risk of social exclusion.

The Department for Transport’s own assessment of the scheme is that usage is 6.7% higher, fares are 6.5% lower and services are 7.1% higher outside London than if BSOG funding were completely withdrawn. The Grant was worth £454 million in 2009/10 and other cuts may also undermine the industry – we have already reported on the loss of the Bus Challenge Fund and the Stoke shuttle bus scheme. City analysts are predicting tough times for companies such as Stagecoach, First Group and National Express.