Ministers want to see more bus operators in England outside London participate in the Bus Fare Cap Grant (BFCG) scheme during its second three-month period in April, May and June, Secretary of State for Transport Mark Harper has said.
In writing to the industry on 24 February about the extension to 30 June of both BFCG and the Bus Recovery Grant revenue support mechanism, Mr Harper acknowledges that some eligible operators elected not to participate in the £2 fare cap at its introduction in January.
While he notes that 148 operators capturing over 4,700 routes are already taking part, it is the intention of the Department for Transport (DfT) that the extension period will grow participation. “As such, I will be allowing new operators to join the scheme, subject to compliance with its terms and conditions,” he adds.
It will remain the case during the second half of BFCG that it is a voluntary scheme. DfT officials will confirm the ongoing participation of existing operators.
Bus Fare Cap Grant funding increased for second period
The latter three-month period will receive up to £75 million of funding, compared to a maximum of £60 million for January to March. While the government hopes that more operators will participate from April, it has been suggested that the 25% uplift includes an inflationary aspect.
One operator has alternatively speculated that the increase could make up for under-funding of the first three months of BFCG, or that it could include scope for change to the generation factor in the theoretically ‘no better off, no worse off’ approach adopted.
The Grant utilises a lump sum reimbursement that was calculated for the first three months of the scheme utilising baseline data supplied by operators. A number chose not to take part on that basis, with Rotala saying in December 2022 that adoption of BFCG by its eligible Diamond Bus-branded operations would lead to “a huge revenue loss” at those businesses.
Scottish Labour has previously called upon the Scottish Government to introduce a similar £2 bus fare cap in Scotland, but it is understood that such a proposal is being strongly resisted by ministers at Holyrood.
Harper cites National Bus Strategy for England commitments
In his letter of 24 February to bus operators in England, Mr Harper says that the further three months of Bus Recovery Grant will observe existing terms and conditions.
Extension of revenue support recognises that the bus industry in England “continues to face a number of challenges that are resulting in reductions to services in some parts of the country.” It was clear to ministers that with no more money beyond 31 March, “there could be significant further reductions to bus services throughout England.”
In a hint that 30 June may not mark the end of funding, Mr Harper brought up previous statements made around the National Bus Strategy for England in his letter. He notes that the government’s aim is to work with the industry “to make bus services more frequent, more reliable, easier to understand and use, better coordinated and cheaper.”
