Minister for Economy, Transport and North Wales Ken Skates has advised Chief Executives of all Welsh local authorities (LAs) that there must be a “guard against overcompensation” of operators. It will be undertaken following the coronavirus COVID-19 pandemic.
To allow that, the terms of all payments to operators – including for the continuation of contracted services that are not operating – should come with a “clawback provision”.
That will allow the subsequent recovery of any “over subsidy” paid where an operator has also taken advantage of mechanisms such as the UK government’s Job Retention Scheme (JRS). Any such reconciliation will not take place until after the pandemic.
The prospect of operators continuing to be being paid for contracted services that are suspended, while also claiming through the JRS for furloughed staff who would otherwise have been utilised on those duties, has already generated significant debate within the industry.
Welsh LAs have been advised that they should pay a minimum of 75% of the value of contracts that are not operating. That conflicts with a Procurement Policy Note issued by the Cabinet Office. It says “at risk” suppliers should continue to be paid at ‘business as usual’ levels.
Where a contracted service continues to operate, even to a reduced timetable, Mr Skates has recommended that the operator is paid 100% of its value.
He has also clarified a previous statement by saying that funding provided through the Bus Services Support Scheme and the MyTravelPass scheme, and concessionary fares reimbursement, will all continue to be made at pre-pandemic levels. Those monies will be paid in advance.
Previously the Welsh Government had said those streams would be suspended and “temporarily replaced” by a ‘hardship fund’. It continues to develop a comprehensive package of measures to support the industry through the pandemic.
