Details of second proposal for coach industry support revealed

The Confederation of Passenger Transport (CPT) has outlined details of its further proposal to the government for financial support for coach industry. It follows an earlier set of plans that were rejected by Transport Minister Baroness Vere on 15 July.

When submitting revised proposals, CPT has stressed that the matter is of the utmost urgency. “The coach industry cannot survive much longer without further direct government assistance, in whatever form that might take,” it says.

Second CPT coach industry support proposal in detail

The second submission for backing “is a value for money option, using existing coronavirus COVID-19 funding mechanisms,” CPT observes. The measures that it calls for are:

Government assistance with postponement of capital payments for 12 months by the lender. That would see the government arrange for existing coach operator business finance agreements to be extended by 12 months, effective from August, for those operators that desire.

It would use existing Coronavirus Business Interruption Loan Scheme (CBILS) or Bounce Back Loan principles. Interest and arrangement charges (if applicable) would be paid by the government, in line with the rules of those schemes, up to 2.5% and a cap of £5m per operator for 12 months from August.

Removal of existing personal guarantees in line with CBILS rules, including a principle private residence exclusion. That would see an immediate suspension of house repossession orders in line with emergency coronavirus COVID-19 legislation.

Access to be granted to support available to the leisure, hospitality and retail industry. To allow the 85% of coach operators that have not had access to grant funding and business rate relief for 12 months to receive parity with those that have.

Government funding to top up, to a viable daily rate, monies paid for existing home-to-school transport until the end of spring term 2021. CPT says this is necessary both for existing home-to-school services that will not be able to run alongside ‘infill’ work, and for additional capacity that will support registered bus services.

If adopted, the four proposals “would ensure that there are sufficient coaches to service future home-to-school needs and to cater for the revival of the traditional work portfolio during 2021.”

The Confederation notes that its plans would also benefit the vehicle manufacture and supply sector, which otherwise stands to shed 4,000 UK jobs over the next nine months, and the government’s recovery agenda and its environmental and air quality goals.

Grave consequences if government fails to adopt

While CPT President Steve Whiteway indicated on Friday 25 July that the government’s hard-line approach to coach industry support may finally be starting to soften, the consequences for both the coach sector and the economy are grave if ministers continue to dig their heels in.

Should no backing be forthcoming, CPT says it is “unlikely” that the industry will be able to cover more than 75% of existing home-to-school services, particularly from November onwards.

It will also not be able to resource any of the additional dedicated capacity that will be needed due to social distancing on local bus services.

Baroness Vere had suggested that an increased requirement for dedicated home-to-school transport from the autumn term would act as something of a windfall for the coach industry.

CPT disputes that. It says that a return of existing home-to-school provision, and the additional dedicated capacity required, “is unlikely to be enough to keep sufficient coach companies viable.” CPT adds that some operators are considering handing back existing contracts where a lack of ‘infill’ work will make them unviable.

The loss of that additional revenue will mean that “many operators will need to charge two to three times more per vehicle [for home-to-school journeys] per day to balance the books.”

CPT predicts that if no support is forthcoming, 23,000 jobs and 1,050 operators will be lost from the industry by April 2021. It also forecasts that 9,100 vehicles would be idle or repossessed by that time. A further 8,000 would be subject to SORN notifications with no viable work or drivers.

Read CPT’s full submission to the government here.