More freedom for councils on bus funding under BSOG reforms

Friday, July 5, 2013 - 15:10
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FREEDOM: Councils have more bus control

Councils are to be given greater control over the way money is spent on some bus services, Transport Minister Norman Baker has announced.

In reforms designed at providing better value for passengers and taxpayers, local authorities will gain more freedom but become accountable for decisions they take.

Additionally, the funding stream will be ring-fenced until April 2017.

The Bus Service Operators Grant (BSOG) reforms come after last week’s Treasury confirmation that current levels of government support for buses will be maintained until at least 2015/16.

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 should incentivise closer partnership between local authorities and operators, providing a test bed for how bus subsidy might be better used.

Mr 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 travelling public and shows our continued commitment to the localism agenda, freeing local authorities from central government control.”

The announcement sets out the government’s package of measures to reform aspects of the existing system of subsidy for the bus industry.

Under existing arrangements, BSOG for both commercial and non-commercial bus routes is administered centrally by the Department for Transport.

From January 2014, BSOG funding for non-commercial routes – those which could not economically operate without support – will be devolved to local authorities.

This funding will be ring-fenced until April 2017 so that each local authority will have to spend it on bus services in their area.

In designated Better Bus Areas, BSOG funding for commercial services will also be devolved. 

BSOG funding previously paid to bus operators in London will also be devolved to Transport for London and the Greater London Authority.

In addition, reforms also close a loophole which has allowed bus companies to claim extra subsidy to run rail replacement and tourist buses, rather than vital local services.

Under new arrangements, this will no longer be possible – sending a clear signal to train companies that when people buy a train ticket, they want to use a train.

A further review of BSOG will be started next year, examining the commercial element of the bus subsidy.

In 2012 there were 4.7billion bus passenger boardings made in England, with more than 60% of all public transport trips made on local buses.

Image courtesy of David, with thanks.

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