Bus revenue funding crisis deepens as TCs enter fray

Edited on 11 February: The Welsh Government on 10 February confirmed a three-month “initial extension” to the Bus Emergency Scheme revenue funding mechanism to the end of June.

Growing uncertainty and angst around future revenue funding for bus services in England and Wales has drawn the Traffic Commissioners (TCs) into the fray.

They published issue-specific guidance on 9 February concerning service registration notice periods ahead of potential resulting changes or withdrawals. It takes the current lack of funding clarity as a justifiable reason for acceptance of a short-notice registrations, albeit with caveats, in those two countries.

That development came as the crisis born of a chronic lack of direction from Westminster and Cardiff on support beyond the end of Bus Recovery Grant (BRG) and the Bus Emergency Scheme (BES), respectively, deepened during week commencing 6 February.

In England, suggestions have been made that no certainty on the matter may arrive until Chancellor Jeremy Hunt delivers his Budget on 15 March. BRG is scheduled to end after 31 March; BES is planned to terminate a few days later at the end of the current financial year.

For operators in Scotland, Network Support Grant Plus – resuscitated by the Scottish Government in late 2022 – is also slated to end on 31 March, with payments reverting to the lower Network Support Grant rate. Scotland is not in scope of the TCs’ statement of 9 February.

‘Very difficult’ landscape for bus revenue funding in Wales…

In Wales, growing concern has been raised that BES will cease without replacement. Deputy Minister for Climate Change Lee Waters told the Senedd on 8 February that the Welsh Government wants to end BES via a taper mechanism, “not face a cliff edge.”

However, Mr Waters adds that the support must end “sooner rather than later.” The Welsh Government continues to attempt to find a solution, but its budget situation is “very, very challenging,” he continues.

Those words have been seen by some in the Welsh bus industry as laying the ground for a hard end to support after BES. In the same address, Mr Waters claimed that the sector in Wales agrees with him that work to “rationalise” networks should take place, in stark contrast to previous political messaging that has promoted more services in the long term.

Meetings with the Welsh bus industry and its representatives to find a funding solution continue.

It has been suggested that news could be forthcoming shortly, but one member of the sector in Wales says that a hard end to funding imminently would have a hugely damaging impact on the country’s bus market

Many operators, they add “are ready to simply shut up shop and walk away.”

…while ministerial radio silence persists in England

In England, no public messaging around the likelihood of funding continuing beyond the current end date for BRG has been forthcoming for over two months. That is despite heavy lobbying by operators and representative bodies in the meantime.

Two insiders have suggested that since Secretary of State for Transport Mark Harper’s appearance in front of the Transport Select Committee on 7 December 2022, the ‘mood music’ around further support has changed. Mr Harper’s words gave hope that more money would be made available, but those sources suggest that a less positive approach has since developed.

Answering a Parliamentary question about the matter on 8 February, Prime Minister Rishi Sunak said that the government will “always continue to see how we can support bus services in the long term,” but he gave no further information. Mr Sunak instead pointed to the claimed £3 billion investment in bus during the current parliament.

TCs ‘seeking to support bus operators and passengers’

In their statement on 9 February, the TCs acknowledge that considerations of future funding packages in England and Wales “remain ongoing” and that operators may as a result decide to cancel or amend services before final decisions are made by ministers.

TCs are thus seeking “to continue supporting bus operators while ensuring that the users of local bus services are provided with sufficient notice of any changes to a registration.”

They view the current position as passing the test set out in Regulation 7(2)(h) of the Public Service Vehicles (Registration of Local Services) Regulations 1986 as circumstances that could not reasonably have been foreseen.

As a result, the TCs will consider a request for short-notice dispensation for that reason. They will adopt a starting position that the 42-day notice period in England, and the 56-day notice period in Wales, will be reduced to 28 days. In England, the requirement to inform local authorities of registration changes with 28 days’ notice does not change.

Where an operator submits an application to vary or cancel a service but later wishes to reverse that decision if further revenue funding is forthcoming, a new application under the short notice dispensation will be needed.

Once any decision is made by ministers on future financial support, the above provisions will be reviewed, the TCs say, although “additional time will be allowed for operators to submit applications to take into account the level of funding available.” The approach outlined by the TCs applies only where they handle service registrations.

Read the TCs’ statement in full here.