‘Subsidy needs are key to Enhanced Partnerships in England’

Enhanced Partnerships are coming to bus services in England outside London

Subsidy is going to be a very important issue with Enhanced Partnerships in England from April 2022. There are three key areas that need to be addressed in that work.

Continuity funding will be required beyond March 2022

Recovery funding will be required beyond the end of the Bus Recovery Grant (BRG) in March 2022. However, mixed messages have come from the Department for Transport (DfT) about whether local authorities should provide some form of replacement or not.

Given the latest advice to local transport authorities (LTAs) on concessionary fare payments for 2022/23 to continue with historic payments on a declining scale, surely something similar should be applied for BRG?

Partnership funding: DfT response ‘unhelpful’

A lot of the ambitions contained in Bus Service Improvement Plans (BSIPs), such as timetable enhancements, decarbonisation and fares reductions, will rely on public sector funding, at least as a kick start. It is unclear, however, what the legal basis for some of that funding might be, given public procurement constraints.

Unfortunately, DfT’s response has been unhelpful – advising that LTAs should consult their own lawyers or use de minimis, without acknowledging that many LTAs, particularly the smaller unitaries, have reached their de minimis threshold already.

The relevant section from the Transport Act 1985 (2008 revision) is:

“An authority issuing an invitation to tender under this section [89] shall, in determining whether to accept a tender submitted in response to the invitation or which (if any) of several such tenders to accept, have regard in particular to:

(a) A combination of economy, efficiency and effectiveness

(b) [Removed in 2008 revision]

(c) The reduction or limitation of traffic congestion, noise or air pollution.”

It will require LTAs that award a tender to enhance service levels to the incumbent operator, where it is not the lowest bidder, to have an objective record and justification for their evaluation process.

There is currently a Subsidy Control Bill going through Parliament, but it is unclear whether its provisions will override those in the Transport Act 1985. It would be beneficial for it to include amendment to de minimis, replacing the current cap with checks that the money is being spent in a way that meets BSIP objectives; represents better value for money than going out to tender; and does not intentionally disadvantage another operator.

Acceptable subsidy for DRT should be seen against fixed route

There has been a boom in demand responsive transport (DRT) schemes, some of which are attracting a subsidy of £15-20 per passenger trip. Ironically, this is being hailed as a success by LTAs that sought to save money by butchering their supported bus networks of services that attracted half that level of subsidy per trip.

If we are going to accept the higher level of subsidy per passenger journey, then we need to evaluate whether a scheduled bus route could provide a batter service at that funding level or if it is justified by the “flexibility” of DRT.