Sunday 28th November 2021
Life is tough at the top, they say, and it’s never more true for bus company managers wrestling with continuing pandemic pressures of running a bus company. Not enough passengers; not enough bus drivers; not enough financial support; no certainty of future Government funding; poor reimbursement for concessionary travel on the horizon; criticism if service cuts and/or fare increases are proposed; continuing congestion; some councils misguidedly offering free car parking to ‘boost High Street trade in the run up to Christmas’; rising cost of diesel and staff pay with average industry costs increasing by around 10% but under DfT rules fares can only go up by RPI … are just some of the issues in managers’ inbox at the moment.
I caught up with a band of dedicated senior managers on a ‘Zoom’ call last week sharing experiences and there was a distinctly gloomy atmosphere about what the next six months will bring.
Normally these meet ups among members of what’s known as ‘The Ten Per Cent Club’ – formed back in John Prescott’s time when he set a target of achieving ten per cent growth in bus passengers over a decade, but in club members’ view was achievable in much shorter timescales with the right approach – are full of positivity with free flowing enthusiasm, energy and innovative ideas. Last Tuesday’s session couldn’t have been more of a contrast.
Never has there been so much uncertainty about vital funding to keep services going in contrast to the last twenty months of pandemic support payments while numbers travelling reduced to as low as 10% of normal times.
Passenger numbers may have recovered to around 70% but many bus companies are incurring losses which unlike light rail operations and heavy rail networks are not being covered by the Department for Transport.
TfL’s prediction of huge service cuts has been well publicised in recent days following dire pronouncements from the finance director as crucial talks are held with the DfT (and no doubt the Treasury will be in there too) regarding funding beyond 11th December with passenger journeys in London still significantly below pre Covid levels.
It seems incredible yet again – it must be the third time since March 2020 – we’re in a position where there’s no certainty of funding beyond the next fortnight. This is no way to run the Capital’s transport.
Despite all this uncertainty mayors in other metropolitan areas are still naively waxing lyrically about the benefits of franchising. Have they not adjusted their financial models to take account of the latest trends in both revenue (shortfalls) and costs (increases)?
While the scale of funding needed is not as extreme as in London for provincial bus operators there’s still a significant shortfall that can’t just be ignored. Claims have been submitted to the Department for Transport for Bus Recovery Grant (BRG) which replaced Covid Bus Service Support Grant in September to help sustain services while passenger numbers continue below pre pandemic levels, but no one is certain how much they’ll receive or when they’ll be paid.
One company with a December financial year end has to assume the DfT will honour its promise and come up with some funding at some point, not that they know how much it’ll be, which is going to make for an interesting end of audit review with the company’s auditors.
Another well known highly respected urban operator with an annual turnover of around £40 million is reporting “a gap of around £1.2 million based on our current projections” and that’s making an optimistic assumption they’ll receive the full claim submitted.
You can’t carry on running a business and fulfill director’s responsibilities like that.
It seems staff shortages are impacting the DfT as well as bus driver availability with so many claims unprocessed and no explanations if some are paid while others are not where companies submit multiple claims for different accounting units. It’s all shrouded in mystery.
BRG ceases in April 2022 when it’s highly unlikely passenger numbers will have fully recovered, not least following the latest news on Covid variants. Concessionary pass reimbursement payments will also revert to the pre-Covid formula from that date meaning further loss of income.
And all this when the National Bis Strategy’s Bus Back Better boosterism is due to begin next April. Consultants at Arup are beavering away analysing Bus Service Improvement Plans (BSIPs) all 79 local transport authorities were obliged to submit by the end of October to fund the sunlit uplands of bus travel nirvana promised in the Strategy published in March.
It’s not surprising reassurance from the Prime Minister himself with his personal endorsement to buses in the documents’s introduction has quickly waned with many feeling it’s yet another example of false promises dreamt up in his surreal Peppa Pig world.
Word on the street is funding bids submitted in the 79 BSIPs comes to in excess of £10 billion whereas available funding once the promised 4,000 electric and hydrogen buses have been paid for along with BRG through to April is not going to be much more than £1billion. Many local authorities are going to be disappointed and you can bet those that do end up getting a financial hand out will feature heavily in any Government announcement along with a smiling Grant Shapps standing alongside a Tory MP from the 2019 intake in a few northern red wall seats.
Adding to these woes, a 19th January cliff edge deadline is fast approaching. That’s the date by when bus companies must submit registrations to the Traffic Commissioners to amend bus timetables (including service withdrawals) applicable ten weeks later from 1st April.
If funding uncertainty is not removed by then bus companies will have to enact Plan B’s service cuts whether or not they eventually end up being one of the lucky BSIP roulette wheel winners. This will mean more pressure on already insufficient local authority budgets if serious reductions in bus provision are to be mitigated or avoided.
On the upside, the general thinking is the industry is now past the worst of the driver shortage despite Government continued attempts to lure PCV licence holders over to HGV driving – a DfT letter sent to all licence holders promoting the virtues of lorry driving has now been followed by paid adverts targeting bus drivers on Facebook.
Despite all this the stoic nature, dedication and enthusiasm of bus company managers shines through and there’s no question of wanting to ‘get out of here’. They’e tackling the issues head on and doing the best for passengers, as they’ve always done.
Good for them.