Ministers announced that the rate at which operators are reimbursed for free journeys for elderly and disabled passengers would be reduced by about £18m a year, together with changes to fuel rebate subsidies designed to encourage uptake of environmentally friendly vehicles as part of a three-year funding package.
However, one senior industry source said the reforms represented a “huge drop” in funding. “The effect is going to be horrendous. They have taken nearly £20m away from the industry and bus operators will have no choice but to increase fares or cut marginal routes,” he said.
The announcement follows lengthy negotiations with the Confederation of Passenger Transport (CPT), which represents bus and coach companies, about reforms to the flagship concessionary travel scheme, which was extended last May to include young disabled veterans, despite an independent review that recommended curtailing access to ensure it remained sustainable.
Transport Minister Stewart Stevenson said: “The Scottish Government is committed to supporting our bus industry, and this agreement with CPT will deliver another three years of significant investment. This substantial outlay is intended to help the industry drive down fare costs, encourage more routes and enable more older and disabled people to use these important services.”
The reforms will see the rate at which bus operators can claim reimbursement for free travel reduced from 73.6% of the cost of a ticket to 67%. The scheme has been capped to £174.2m in the next financial year, rising to £187m in 2012/13.
In addition, ministers announced changes to the Bus Service Operators’ Grant, which will increase by £5.8m to £66.5m in 2010/11. The scheme is also intended to provide incentives to operate low-carbon vehicles, such as hybrid and electric models, which will receive twice the funding.
However, industry sources also questioned whether major companies such as First and Stagecoach, which dominate the market in Scotland, would respond to the incentive as it has only been guaranteed for a year. “Hybrid vehicles cost 50% more than standard vehicles and have a 13-year depreciation. It is hard to see how companies could make that sort of investment if funding is only in place for a year,” one source said.
A spokesman for CPT Scotland said: “While the Government’s decision to cut the scheme’s reimbursement rate is disappointing, CPT’s members remain fully committed to providing Scotland’s passengers with the most reliable, efficient and comprehensive bus network achievable within the financial constraints of the funding package.”
The Association of Transport Co-ordinating Officers (Atco) Scotland, which represents local authority transport managers, said it was waiting to see if bus companies cut services as a result of yesterday’s reforms.
Karl Vanters, chair of Atco Scotland, said: “It is difficult to see how councils could cope with any further reduction to bus routes as the budgets for subsidising services are already fully committed.”
Liberal Democrat transport spokeswoman Alison McInnes added: “Increasing the Bus Service Operators’ Grant is long overdue. However, coupled with the review of concessionary fares funding, it looks like the Government is giving with one hand and taking away with
the other.”
