Welsh Government has proposed deep cuts in bus operator payments for participating in concessionary travel scheme, but misses its own deadline

Welsh transport minister Edwina Hart was pictured last week (above) in Aberdare cutting the tape on a fleet of 17 brand new buses – a £1.7m investment by Stagecoach. However, Stagecoach and other bus operators in Wales are still waiting for confirmation of cuts to the Welsh Government’s spending on concessionary travel after March 31, 2014. They say that 1,000 jobs are at stake.

The Welsh Government had proposed to slash the funding by a sum that exceeds the annual profits of Welsh bus operators, but has missed its own deadline for informing bus operators of changes to the concessionary travel scheme after March 31, 2014, when the current three-year agreement ends.

Some managers were cautiously optimistic this week that civil servants were reconsidering the proposed 23% cut in the reimbursement rate amid suggestions that redundancy and other costs would outweigh savings to the concessionary budget.

The Welsh Government is required to give operators four months’ notice of any major changes to the scheme, which began in 2002 with reimbursement at a mutually agreed 73.59% of each operator’s average single fare. The Welsh Government’s proposed new rate of 56.3% from April 1 (higher than the 46% it had initially proposed) would have needed to be confirmed in writing by December 1.

On November 29, the last working day before the deadline, there was no written confirmation and the Welsh Government re-issued its previous press statement: “We are currently in negotiation with bus operators and local authorities on the terms for concessionary bus travel reimbursement for 2014-15.”

Bus managers said the public statement contradicted Welsh Government officers’ insistence in private meetings that they would not negotiate over the 56.3% rate. “They’ve said there will be no further negotiations,” said Bev Fowles, managing director of South Wales Transport. “They are prepared to have discussions to ‘crystallise’ the difference between us.”

Coincidentally, Edwina Hart met senior Stagecoach bus figures on November 29 for the launch of new buses for the Aberdare area. The photo call had been scheduled before the Welsh Government first proposed the dramatic reduction in reimbursement.

Hart said at the launch: “Bus services are crucially important to many people in enabling them to access education, training, and employment or to get out and about to access everyday services and facilities.”

The Confederation of Passenger Transport had put the same arguments to her officers during meetings over the concessionary scheme, but by late November operators were resigned to a loss of income which would, in many cases, exceed their annual profit margins. The resulting contraction of services, should the 23% reduction proceed, would probably be so severe that industry staffing could reduce by at least 1,000.

Fowles said: “Definitely it [the reimbursement cut] will cost more than it will save. If you make 1,000 people redundant, you’ve only got to look at the redundancy costs to the nation.

“We will try going back to the local authorities [who contract SWT to operate services] but they’re already waving the white flag. They haven’t got any money.”

A council transport officer, who asked not to be named, estimated that councils would have to pay 20% more to subsidise the same bus services as a result of the reduced reimbursement, and would be expected to replace commercial services which became unprofitable. The Welsh Government recently reduced councils’ bus grant by more than 26% recently, and transport budgets will fall further in April.

The cut in reimbursement would cost more than it saved, he said. “We will find that a lot more care will be required for people who are totally left out of society because they’ve got no way to travel. They will become dependent on the council and health services. They’ll need people to call at their homes.”

 

This article, and many others, appears in the latest issue of Passenger Transport.

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