Renewed concerns about an inconsistent approach from local authorities (LAs) to payments for suspended home-to-school contract services have been raised by several operators, with one claiming that less than 100% of the agreed daily rate risks putting some companies out of business.
The warning comes less than a month after the Confederation of Passenger Transport (CPT) urged Westminster, and devolved governments in Cardiff and Edinburgh, to work with LAs to ensure that payments are maintained in full where services are not required.
In England, CPT CEO Graham Vidler wrote to Minister of State for School Standards Nick Gibb on 6 January asking him to repeat government advice from 2020 that full payment should be made. In his letter, Mr Vidler said that the industry’s ability to transport pupils when schools reopen will be “under significant strain” if they are not. Mr Gibb has not acted on that request.
No guidance leads to variation in home-to-school contract payments
Letters and emails forwarded to routeone demonstrate that there in England and Scotland, there is wide variation in the level of payments for suspended home-to-school contracts. That scope extends from their full value (albeit with some conditions) to a proposal from at least one LA to pay nothing. In Wales, guidance to LAs that a rate of 75% should be paid leaves the situation much clearer.
While the approach in England and Scotland has introduced a ‘postcode lottery’, the situation is not universally bad. In Scotland, at least two LAs are paying more now for suspended contracts than they did in 2020.
Additionally, the only caveat introduced in some instances of where 100% of the value is being paid is that staff involved must not be subject to the Coronavirus Job Retention Scheme (CJRS) and that vehicles must be available for use on alternative duties.
However, the view in England is clouded by the approach to payments for temporary additional dedicated services funded by the Department for Education (DfE). That money has been stopped by at least one LA that is otherwise maintaining contract payments at 100%.
DfE made available £27m during the first half of the spring term for this purpose. A spreadsheet listing LA recipients is here. In a letter dated 13 January, Department for Transport Director, Local Transport Stephen Fidler said that funding “remains in place.” routeone has attempted to obtain clarification from DfE as to whether that is indeed the case. No response had been received at the time of writing.
50% of school contract payments after change of policy by one LA
Demonstrating the level of variation by area, Warwickshire County Council (WCC) earlier this month told operators that from 18 January they would receive 50% of the daily rate for suspended contracts.
That followed an earlier email in which WCC said that as “school closures are for COVID reasons, you will still be paid in full if you invoice in the usual way” where instructions to suspend services had been issued. While sympathetic to the pressures placed on LAs, one operator describes the change of policy as “a shock.”
In its later communication – which also refers to local bus services – WCC says it has “been instructed by government to introduce some reduced payments to reflect service levels,” although it is not clear whether that comment refers only to concessionary travel reimbursement.
In its most recently-sent communication to operators, WCC accepts that “such a reduction in funding is not ideal,” but it adds that payments for suspended services were maintained at 100% until 18 January.
“We… have a duty to protect public funding and cannot continue [to pay the] full rate for services that are not operating,” it says.
Contractual obligations exceeded in Buckinghamshire
Buckinghamshire County Council told operators on 7 January that it would pay 80% of the daily rate for contracts that are non-operational, until the February half term. At that point, the situation “will be reviewed again.”
However, BCC notes that an 80% level of payment is well above what it is contractually obliged to pay in the case of school closures. Those arrangements would normally require a 60% payment for the first five days only.
BCC says that it is “in a difficult financial position” because of the pandemic. A loss of income from ticket sales means that its overall end of year situation for home-to-school transport “is forecast to show a significant overspend.”
Scotland: Some positive news, some bad
In contrast to experiences in Buckinghamshire and Warwickshire, the picture for operators of home-to-school contracts for North Lanarkshire Council (NLC) that are suspended was initially much better than it was during in the first part of the COVID-19 crisis.
In 2020, NLC told operators that where staff were subject to CJRS, it would pay 33% of the value of each suspended contract. That was received with dismay. Businesses involved claimed that the stipulation was issued at the point by which they had already furloughed staff.
On 22 January, however, NLC informed operators that during the current period ofhome-to-school service suspensions they would receive 100% of contract payments up to and including 29 January.
That was subsequently extended to 5 February. After that, 75% will be paid until 15 February or as otherwise noted.
“The Council recognises that [COVID-19] could have a significant impact on businesses of all sizes, and that there is a need to support providers of services so that they are better able to cope with the current crisis and to resume services when the outbreak is over,” NLC’s most recent letter states. That change of position was welcomed by one operator that carries out work for NLC.
At the opposite end of the scale, one LA in Scotland has proposed paying nothing for suspended contracts beyond 5 February, as per a change to contract terms and conditions agreed in 2020.
The Authority concerned is one that initially paid 100% when services were suspended during the early part of the pandemic. It has been suggested that the failure of a small number of operators to observe stipulations at that time to keep drivers and vehicles available for other purposes has led the LA to adopt a tougher approach now. CPT Scotland says it is fighting the LA’s plans.
75% common in Scotland and advised by government in Wales
75% payment is the most common position adopted by Scottish LAs, CPT further advises. However, no guidance has been issued by the Convention of Scottish Local Authorities relating to payments during the current period of service suspensions, a change from its position in mid-2020.
As a result, LAs in Scotland are – like those in England – free to adopt an approach that they deem appropriate.
The Welsh Government’s guidance that LAs pay 75% of the daily rate for suspended contracts has been accepted with little compliant by operators, one has told routeone. They believe that such an approach has been accepted after Welsh operators observed the haphazard situation across the border in England.
