Transport Minister, Norman Baker, has announced that councils are to be given greater control over the way money is spent on some non-commercial services ‘providing better value for passengers and taxpayers’. The announcement is the government’s response to the bus subsidy reform consultation conducted from September to November last year. The amendments to BSOG are designed to give more freedom to local authorities while making them accountable for the decisions they take. The funding stream will be ringfenced until April 2017. This devolution of bus subsidy for locally tendered services comes after last month’s Spending Round when the Treasury confirmed that current levels of government support for buses will be maintained until at least 2015/16.
From January 2014, BSOG funding for non-commercial routes will be devolved to local authorities. BSOG funding previously paid to bus operators in London will also be devolved to TfL and the Greater London Authority. In addition, the reforms should also close what it describes as ‘a loophole’ which previously allowed bus companies to claim BSOG on rail replacement services and buses catering for tourists.
Several authorities will also be established as new Better Bus Areas this autumn, receiving increased funding to invest in bus improvement measures. These Better Bus Areas are intended to incentivise closer partnership between local authorities and operators and provide a test bed for how the money might be better used.
Norman Baker said, ‘These important reforms will give councils more freedom to determine appropriate bus provision, handing more power to local communities to take decisions based on local knowledge and priorities. This will mean better buses for the travelling public and shows our continued commitment to the localism agenda, freeing local authorities from central government control.’
CPT Chief Executive, Simon Posner, said, ‘This is a fair outcome to the bus subsidy review. This announcement, following on from last week’s Spending Review which saw the amount of financial support for the industry remaining broadly the same, demonstrates that the Government clearly recognises the crucial role local bus services play in supporting the economy. The news that the devolution of BSOG outside London has been postponed until January next year is particularly welcomed and will give all parties the opportunity to prepare for the change. Striking this deal demonstrates once again the deep understanding and unswerving support that Norman Baker shows to the bus industry and its passengers. For its part, the industry will continue to do what it does best – provide high quality, reliable bus services which meet local needs.’
Chief Executive of Greener Journeys, Claire Haigh, said, ‘Greener Journeys welcomes the Bus Services Operators Grant (BSOG) reforms announced today by Transport Minister, Norman Baker. The ring fencing of the devolved bus subsidy is crucial. This will give operators the certainty they need to continue to provide high-quality, forward-looking services and will give passengers more security that services so vital to their lives will continue. Better targeting of funding is also a positive move. Making sure services connect the right people to the right places – to places they can work, learn and spend – will boost patronage and help grow the economy. The confirmation that BSOG funding has been safeguarded, with the other reforms announced today, are essential steps in ensuring the England’s bus services continue to provide a first-rate service to the bus users who make 4.7bn trips every year up and down the country.’