BSOG reprieve; reform in England to mean greater local control
Fri 05 July 2013
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The Government has announced that the Bus Service Operators' Grant (BSOG) - the subsidy received by bus operators against the cost of fuel - will continue but in a revised form. Following the 2013 spending review, transport minister Norman Baker said that from January 2014, BSOG funding for non-commercial routes (those which are not economically viable without support) will be devolved to local authorities. This funding will be ringfenced until April 2017 so that each authority will have to spend it on bus services in their area.
Several authorities will also be established as new Better Bus Areas (BBAs) 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, providing a test bed for how bus subsidy might be better used. In designated BBAs, BSOG funding for commercial services will also be devolved. Funding previously paid to bus operators in London will be devolved to Transport for London and the Greater London Authority.
A further review of BSOG will be started next year, examining the commercial element of the bus subsidy. In the interim, non-BBA commercial services will continue to be eligible for low carbon bus incentives.
Transport minister 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 travelling public and shows our continued commitment to the localism agenda, freeing local authorities from central government control."
In response to the findings from the consultation, the Government has decided that:
· BSOG funds will be devolved to local authorities (including anywhere a Quality Contract is introduced), in London from October 2013 and to local authorities outside London from Jan 2014.
· The calculation of BSOG funds will be based on the latest available figures for tendered routes and services, effectively locking in bus service cuts since May 2010.
· BSOG funds will continue to be ring-fenced for expenditure on buses until April 2017.
· LAs seeking a Quality Contract will have to prove they can work in partnership with bus companies in order to apply for and receive Better Bus Area (BBA) funds. This is a further incentive for bus companies to block a Quality Contract which would regulate private operators’ fares and service levels within a defined area.
· Rail replacement bus services are no longer eligible for BSOG funds.
· A second consultation stage in 2014 on a proposal to devolve to local authorities' public funding for smart ticketing and vehicle location technology, as well as greener buses.
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