DfT consults on bus subsidies - seeks to improve incentives for environmental progress

Thu 13 March 2008 View all news

The Department for Transport (DfT) has announced plans to consult on options to reform the current arrangements for bus subsidies with particular emphasis on the Bus Service Operators Grant (BSOG). The current operation of BSOG has been seen to be a barrier to the achievement of emissions improvements from the bus sector.

In a foreword to the consultation, the Transport Secretary Ruth Kelly says: "...There is also a good case for changes to this grant to focus it more effectively on our objectives – particularly in relation to the environment. This is an increasingly important objective, and I place high weight on going as far as we can to mitigate environmental costs and make sure that all sectors help to tackle climate change, both within short term constraints and in the longer term."

Payments within BSOG will total £413 million in 2008 and the grant forms part of the Government’s £2.485 billion support given to the bus industry.  The DfT has requested LowCVP respond to the consultation and in particular provide answers and evidence regarding the continuing relevance of the definition of a low carbon bus, currently specified as 30% WTW below Euro 3, and the level at which a distance based subsidy for low carbon buses should be set.

Bus operators and other interested stakeholders have until 5 June to respond to the consultation.

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