bus industry subsidies

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Dear Colleagues,

Bus industry subsidies

The Government has responded to the findings of the Department for Transport’s consultation on devolving the Bus Service Operators’ Grant (BSOG) to Local Authorities (LAs) and other features of the system of public funding for the privatised bus industry. BSOG is a substantial source of funding to private bus companies and was worth over £350m in 2012-13 alone. This money will now be allocated to bus companies by local government rather than the DfT.

The union responded to the consultation which was launched in September 2012, in support of devolving BSOG funds in principle but opposed to many of the Government’s proposals, including the use of the latest funding streams to calculate how much BSOG each LA would receive which would lock in the 1,300 cuts to bus services that have been made by bus companies and local authorities in the last three years. RMT’s response to the bus subsidy reform consultation can be viewed here: http://www.rmt.org.uk/templates/internal.asp?nodeid=92599

In response to the findings from the consultation, the Government has decided that:

· BSOG funds will be devolved to local authorities (including anywhere a Quality Contract is introduced), in London from October 2013 and to LAs outside London from Jan 2014.

· The calculation of BSOG funds will be based on the latest available figures for tendered routes and services, effectively locking in bus service cuts since May 2010.

· BSOG funds will continue to be ring fenced for expenditure on buses until April 2017.

· LAs seeking a Quality Contract will have to prove they can work in partnership with bus companies in order to apply for and receive Better Bus Area (BBA) funds. This is a further incentive for bus companies to block a Quality Contract which would regulate private operators’ fares and service levels within a defined area.

· Rail replacement bus services are no longer eligible for BSOG funds.

· Further consultation in 2014 on proposal to devolve to LAs public funding for smart ticketing and vehicle location technology, as well as greener buses.

I would be grateful if you could bring the content of this circular to the attention of members and I will keep you updated on the union’s ongoing campaign against the privatised bus industry.

Yours sincerely,

Bob Crow

General Secretary