12 July 2010
Government review of Bus Service Operators Grant puts services at risk Low-income groups to be hit worst by 10% fares rise and routes cut Thousands of bus driver and manufacturer jobs under threat England's local bus networks are at risk from Beeching-style cuts if the Government withdraws the only direct national funding as part of its spending review, a coalition of pro-public transport groups warned today.
Local authorities, bus operators, transport campaigners and unions have written to Transport Secretary Philip Hammond to warn of big fare rises, services cuts and job losses if the Bus Service Operators Grant (BSOG) is scrapped.
They fear a decision could be made in weeks to cut BSOG, formerly known as the Fuel Duty Rebate (FDR), which rebates bus operators for the fuel duty they pay in running local registered bus services. It also covers many rural, school and socially important services.
Letters have been sent to all 533 MPs in England (PDF, 42K), while an Early Day Motion supporting retention of BSOG for the most widely used form of public transport has also been laid down in Parliament.
Stephen Joseph, Executive Director, Campaign for Better Transport, a co-signatory to the letter, said:
"Scrapping BSOG could do for England's buses today what Beeching did for the UK rail network in the 1960s. In many areas, it could tip buses into a spiral of decline with fares rises, falling patronage and service cuts, all with impacts on some of the poorest in society. It would trap people into dependence on cars and add to local traffic problems. Pensioners could find themselves with free bus passes but no buses on which to use them."
Cllr Mark Dowd, Chair of the group of six Integrated Transport Authorities, a co-signatory to the letter, said:
"Outside London the bus is the main form of public transport – and is also relied upon the most by low-income households. Yet, despite this, levels of Government support are a very small proportion of those the rail industry receives and even these relatively modest BSOG subsidies are now under threat. If we want to reduce carbon from transport, give jobless households the means to access work and ensure that our cities keep moving then we need to ensure bus networks are maintained – and that means buses should get their fair share of Government support."
Shaun Spiers, Chief Executive at the Campaign to Protect Rural England (CPRE), said:
"Cutting the bus grant may look like a quick way to slash spending, but the social, environmental and economic costs to the countryside would be huge in the long term. Those unable to drive could be forced to move out of rural areas or face isolation, while those living car-free in towns may be cut off from the countryside. Closed pubs and post offices would be joined by derelict bus shelters, the final straw for the vibrancy of many villages."
Brian Souter, Stagecoach Group Chief Executive, said:
"We have attracted 15% more passengers to greener bus travel in the past five years. We have done it by offering the best value fares in Britain, investing hundreds of millions of pounds in new buses and passenger improvements, and working in partnership with local authorities.
"Independent research shows that every pound spent on BSOG delivers up to £5 in wider benefits to our communities. Scrapping it would mean a huge, regressive tax hike for bus passengers, would cost jobs and be bad for business. The worst impact would be on the pockets of the poorest in our society whose bus services are a lifeline and it would put many smaller bus operators and other suppliers out of business."
The letter to the Government and MPs warns that scrapping BSOG would have damaging and wide-ranging consequences for local communities, public transport services, low-income groups, the UK economy and the environment, including:
- Bus fares would rise by 10% overnight, with a similar 10% cut in commercial bus services. The cuts would be most acute in rural areas and on lower-used evening and weekend services. Even services in urban areas would be affected.
- Bus operator costs would rise by around 10%. Combined with running fewer services, this could lead to the loss of up to 10% of the 170,000 people employed in the bus industry, a quarter of which is made up of independent and smaller operators, many of whom run rural and tendered services. Reduced investment would also result in drastic cuts in new buses, with devastating consequences for UK manufacturers and suppliers.
- Transport authorities and local councils, whose budgets have already been cut, would be unable to make up the funding shortfall. All local-authority-subsidised services would become unprofitable, requiring either 10% more contract payment or service cuts. It would also push up the costs of running a significant number of school services. Local-authority-funded concession travel reimbursement would have to increase by 10% in line with fares.
- Government finances would also be hit, with savings on BSOG significantly eaten up by increases in the welfare budget through higher unemployment, higher costs of supporting previously commercial bus services, and lower tax income from successful bus operators, manufacturers and suppliers.
- Communities would also be damaged, as the sharp rise in the cost of bus travel and cuts in bus networks would increase car use, worsen congestion, damage the environment and lead to higher costs for businesses.
Bus passengers, many of whom are on low incomes, already pay more fuel tax than wealthier air and rail passengers. While buses still pay a significant amount of fuel tax, aviation pays none. BSOG is equivalent to a £437m a year investment in buses. In contrast, aviation gets a £6.5b a year tax break by paying no fuel duty.
A previous study for the Government by the Commission for Integrated Transport found that every £1 invested in BSOG provided between £3 and £5 of wider benefits .
Co-signatories to the letter to politicians include:
- Campaign for Better Transport
- Confederation of Passenger Transport UK
- Greenpeace UK
- Friends of the Earth
- Campaign to Protect Rural England
- Community Transport Association
- Guide Dogs
- Bus Users UK
Notes to editors:
Bus Service Operators Grant: Government provides a fuel duty rebate on approximately 80% of the fuel used by buses. Bus operators pay fuel duty tax on the remaining 20% of their fuel, while train operators using diesel pay only a small amount of duty and airlines pay none.
Government statement on the importance of BSOG: Transport Minister Norman Baker told the House of Commons on 29 June 2010: "The benefits of that grant are clear: it ensures that the bus network remains as broad as possible, while keeping fares lower and bringing more people on to public transport, with the obvious benefits of reducing congestion, lowering carbon emissions and improving air quality in our towns and cities."
Buses: provide low-cost, low-carbon transport links to work, education, health, leisure, shopping. They are the safest, greenest and most used form of public transport, with 5 billion passenger journeys a year, and are vital for the 25% of Britons who don't have a car. They are also most heavily used by the lowest income groups, households on incomes under £10,000 (Source: Passenger Focus/TAS, 2008)
 Source: Making aviation pay its way – the case for raising more revenue from plane journeys, Green Alliance, June 2010
 Source: Commission for Integrated Transport, March 2009.