Spending review impact, part 4: buses

Last in a series of short articles looking at what effect the Government’s Comprehensive Spending Review may have on transport in Greater Manchester

We’ve saved the best for last – except when I say “best” I mean most worrying for the humble passenger. All in all, there are cuts likely to come as well as fare rises.

Bus Service Operators Grant

Formerly known as Fuel Duty Rebate, BSOG is a rebate to bus operators for the fuel duty they pay running local registered bus services – a tax break. Whilst there were fears that BSOG could be scrapped completely, the Government will reduce the amount paid by 20% beginning in April 2012. Bus services will become more costly to operate as a result, so expect moves to balance the books: fare rises, reductions in frequencies, cuts to less popular routes or at less busier times of the week or day. At least the incentive for operators who invest in smartcards, low carbon buses and automatic vehicle location will be maintained for the time being.

Local government funding cuts

If ever a bus service becomes loss making, the local authority have the ability to step in and provide subsidy to keep it on the road should it serve a local need. But with cuts to local authority funding, there may not be enough money to keep subsidising the existing socially necessary services, let alone help come to the rescue of other services. Neighbouring authorities such as Warrington, Cheshire East, West Yorkshire and Lancashire have already cut or are threatening to cut services. Greater Manchester may be insulated for a while due to having its Integrated Transport Authority – a budget agreed in advance by local authorities – but there are already warning signs. With the likelihood of bus services becoming more expensive to operate, there will be financial pressures on existing contracts to contend with.

Concessionary travel reimbursement

The Department for Transport is looking to change the rules by which bus operators are reimbursed for carrying senior citizens free at point of use at off-peak times: downwards, naturally, estimated to save £68–£133 million. Again, if bus operators receive less money in reimbursement for carrying senior citizens then that may be enough to push some services into the unprofitable bracket. Having said that, we’re not strangers to controversy over reimbursement rates to bus operators here in Greater Manchester.

Projects up in the air

Several local transport projects planned to be delivered with capital funding from the government have been put on freeze. A pot of £600 million has been put aside for the projects nationally, but that isn’t enough for them all to go ahead. A decision is expected by the end of the year as to which projects will get the money, but until then the plans for a new bus station in Rochdale and the Manchester cross-city bus priority scheme are on hold. Although outside the county borders, the Pennine Reach rapid transit scheme in East Lancashire is another affected scheme that would have some knock-on effect to some cross-boundary services.

Competition Commission

As if all that wasn’t enough, the Competition Commission’s inquiry into local bus services continues afoot, with provisional findings due in March and a final report published due in the autumn. Is competition a good thing or a bad thing? Experience in Greater Manchester tends to suggest that on-street competition doesn’t lead to high quality services and rather results in an unseemly brawl. What do customers prefer: cheap fares or quality service?

In summary

Gloomy, but there could be opportunities as well. As Omnibuses blog asks, might the high price of fuel tempt people out of their cars?

• Risky Future – Omnibuses blog spells out dangers to bus services
• Save our Buses – Campaign for Better Transport
• We warn MPs of bus service cuts to come – TAS Transport Briefing