Stagecoach threatens legal challenge over proposed Welsh concessionary travel changes

Stagecoach, Wales’ biggest operator running 400 buses, has threatened a legal challenge over plans by the Welsh Government to make damaging changes to the country’s concessionary travel scheme. .

The company has given the Welsh Government a deadline of 1 April to re-think its decision to set a new rate at which operators are reimbursed, which would result in a 24m cut in the scheme’s budget, or face a potential judicial review.

Stagecoach says that legal advice from Herbert Smith Freehills suggests key failings in the process the Welsh Government has followed. The Government may also be liable to pay compensation for “violation of EU law.”

Lawyers have also written to 10 local authorities in Wales responsible for implementing the concessionary travel scheme in areas covered by Stagecoach operations, pointing out that following the Welsh Government’s new guidance would be unlawful.

Stagecoach has attacked the “brutal, flawed and unlawful cuts” by the Welsh Government, which last month confirmed a three-year funding package of 189m for its free bus travel scheme across Wales. The budget has been cut by over 11% from the 213.3m package provided over the past three years.

The scheme provides free travel to more than 720,000 concessionary pass holders in Wales, including Armed Forces personnel and veterans. Under the scheme, bus operators should be reimbursed for the full costs of participating in the compulsory scheme.

However, legal experts suggest the Welsh Government has erred in law by unilaterally capping the scheme to fit within an allocated budget, rather than following the statutory “no better, no worse off” principle.

CPT Cymru has written to Welsh Transport Minister, Edwina Hart, to express its concerns. Operators warn that the cuts will undermine public transport across the country, damage local communities and hit jobs and the economy. They said the impact of the funding cut would be even worse after taking account of inflation.

Stagecoach in Wales MD John Gould says: “The Welsh Government has so far refused to listen to warnings from bus operators, passengers, public transport campaigners and community groups. Legal action is a last resort and we have written to the Welsh Government to give them an opportunity to re-think their decision. We want to protect people from the devastating impact of these brutal, flawed and unlawful cuts.

“The Government has broken the key principle that operators are properly and fully reimbursed for the costs of participating in the mandatory scheme. It has rewritten the rules to its own specification and to suit its own purposes while dressing up the changes as the result of an independent review. The damage will be felt all across Wales and people are rightly angry.”

The cut also follows the Welsh Government’s 25% reduction in Bus Service Operators Grant (BSOG) in the last 12 months, which has already increased the cost of bus travel for passengers and adversely affected the viability of bus routes.

In a statement the Welsh Government says: “The new rate, recommended by an independent review, maintains the principle that bus operators who take part in the scheme are no better and no worse off. Any operator who believes they may be adversely affected by a local authority’s reimbursement arrangements have the right to appeal to Welsh Ministers.”