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LGA - Local control essential to prevent soaring bus subsidies, LGA report argues

Escalating bus subsidies will cost an extra £1.3billion pounds of public money over the next five years unless the system is reformed to give local people more influence over bus services, council leaders warned today.

Nearly three billion pounds of taxpayers’ money is used to support bus services every year, equivalent to 60 per cent of the industry’s turn-over, and that cost is climbing at an annual rate of nine per cent. The total has more than doubled in less than ten years but passenger numbers outside London are falling, as confirmed by the most recent Government statistics.

A new report, unveiled today by the Local Government Association, says the current system of subsidies is not the best way of improving services or keeping fares down. It argues the increases could be controlled by giving local people, through their council, more of a say on how their bus services are run, whilst protecting local bus services.

It is proposed that better control of what bus subsidies are used for will make resources go further, preventing further expensive increases and protecting funding for valued schemes such as concessionary bus fares, which local government is wholeheartedly committed to providing but which might be under threat because of public spending cutbacks at a national level.

It is argued that councils, on behalf of taxpayers, should be able to impose conditions on the public money which is provided to support bus services. Depending on their local situation, councils could agree with bus companies to protect existing routes, insist on the creation of new routes or offer reduced fares to job seekers.

Cllr Peter Box, Chairman of the Transport and Regeneration Board at the LGA, said:

“We need to make sure that taxpayers and bus passengers start getting the best possible deal for the many billions which have been invested in bus services. Reforming how subsidies are provided and overseen is the obvious way to protect the services people value the most during these times of public spending cutbacks.

“Halting or cutting spending within the existing system could have a catastrophic effect on services and fares. Only radical reform can offer the right level of control over bus spending without leaving it up to bus companies to decide where the axe will fall. It’s high time taxpayers are properly recompensed for all the public money which has gone into bus services.

“Bus travel is a lifeline for a huge number of people, and is the most frequently used mode of public transport in England. Giving councils influence over how bus companies operate in their area, in return for the substantial investment they’ve become used to, will allow councils and operators to work in partnership to tackle particular local problems, for example by increasing services on popular market days or running services at a time which will help job hunters reach training courses.

“The concessionary fares scheme, which provides free bus travel for thousands of people every day, has been a great success and is something local government is committed to providing.

 “We need to question why bus fares have gone up so much at a time bus profits remain healthy. The fact bus services are still not up to scratch in too many areas is depressing evidence that the market cannot be left to sort this out itself.”

Author: LGA Media Office
Contact: LGA Media Office, Tel: 020 7664 3333

Notes to editors

Copies of the full report, “The future of bus subsidy”, are available at http://www.lga.gov.uk/lga/publications/publication-display.do?id=13676115

The latest quarterly statistics for bus travel were released by the Department for Transport on June 17th. They showed that bus passenger journeys in England decreased by 1.8 per cent between 2008-09 and 2009-10. http://www.dft.gov.uk/pgr/statistics/datatablespublications/public/bus/

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