Your World Bus fares to rise
Bus fares to rise
Bus passengers face fare rises and reduced services as the Department for Transport targets its operators' grant.
The secretary of state for transport, Philip Hammond, views the bus service operators’ grant (BSOG) as one of the most vulnerable items in his department’s £15.9bn budget ahead of the comprehensive spending review, according to informed sources. The subsidy pays for about 80% of operators’ fuel duty and its removal would increase fares by 6.5%, with a similar reduction in services. The impact would be disproportionately felt outside
“BSOG is one of the places where the DfT is unable to guarantee that there will be no cuts,” said a government source. However, the scale of the reduction is dependent on the outcome of negotiations with the Treasury ahead of the review next month.
One industry analyst said abolition of the subsidy represented a rise in fuel costs of 43%, and would push up overall industry costs by more than 8%.
Chris Cheek, editor of the Bus Industry Monitor, said the introduction of more fuel-efficient buses, such as hybrid vehicles, would mitigate the increase further and prove the industry's well-established ability to withstand shocks.
Cheek said the withdrawal of the subsidy might benefit operators.
"It would at least mean an end to the uncertainty caused by changes of public policy and the constant tinkering and attempts at micro-management we've seen," he said.
A DfT spokesperson said: "Any decision on the future of BSOG will be made in the wider context of the spending review taking into account the potential impact on community and rural transport services."
[Source: Guardian]
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