Home-to-school contracts: Fuel price escalator needed soon

Fuel price escalator needed for home to school contracts

Diesel costs are never far removed from industry discussions. One operator recently paid 170ppl for a bulk delivery. While that is high even by current standards, it illustrates the current problem clearly.

Research by RHA shows that bulk prices rose by almost 50% in 12 months to March. Although there is an early indication that the crisis could have peaked, what have not yet done the same are angst levels among operators of home-to-school contracts. A minority have some insulation from diesel fluctuations thanks to contract terms, and others benefit from understanding local authorities (LAs). Most have neither.

That is a problem for those businesses. It is also a potential issue for many LAs. A risk now exists of some operators cutting their (literal) losses and handing work back. Retendering will be based on a new worst-case scenario. The LA will pay the new going rate, or some children will not access education.

In infamous comments about the coach industry in January 2021, Under-Secretary of State for Transport Baroness Vere highlighted home-to-school transport as an essential service. It is now essential for ministers in England, Scotland and Wales to recognise that. But while there is no sign of diesel costs returning to the level they were at 12 months ago, mitigation must still be fair for all.

Enter the fuel price escalator. Advocated by an operator that has already returned one contract, it would be directly tied to the price of diesel. They would rise and fall together. It is fair and it is just, and it is needed nationally sooner rather than later.