Bus services at risk as Welsh Government warns it can no longer subsidise at current levels
The Welsh Government is discussing how to maintain a ‘core bus network’ with warning that it cannot “continue to subsidise services” to the current level.
The comments, from Deputy Minister for Climate Change Lee Waters, came during a Senedd committee hearing last week.
The Climate Change, Environment, and Infrastructure Committee probed the Deputy Minister over the future of funding for Wales’s bus networks.
Delyth Jewell MS opened the questions on buses by asking about the bus emergency funding scheme: “In the four weeks between when you sent our committee the draft budget paper, which included the £28 million allocation for that scheme, and then your statement on 10 February, what had changed in those four weeks?”
Lee Waters MS said: “Well, it’s been an evolving picture really. As the extent of the pressures within rail have become more apparent, we have got significant cost pressures, as has every infrastructure project in the western world, because of inflation, because of supply chain disruption, because of skills shortages, so, that is, I think, plain and clear to understand.
“That has created pressures within the whole main expenditure group, both from the housing costs—I think we covered this when we did the group budget session—as well as every infrastructure cost.
“So, we’ve had to absorb the cost rises, which have been very significant, within the MEG. So, that’s a significant issue.”
“There are also changes within the bus system itself—the way that concessionary fare demand has flexed, the way that we’re able to sustain that funding, given the other pressures within the Government’s overall budget.
“And that has created a very acute pressure, not just in Wales, but across England and Scotland too. What we’re doing in Wales is what they’re not doing in England; we are providing a three-month period, rather than a more severe cliff edge.
“But I’m not going to skirt around the problem: we do have a very difficult dilemma here, that the privatised bus industry has only been able to survive through public subsidy during COVID. Passenger numbers have not recovered, the fare box has not recovered, and unless we continue to subsidise to the levels that we can, we’re going to have to see service changes.
“We cannot continue to subsidise to the level we have been because of wider budget pressures. So, we need to figure out how we can get a smooth glide path out that keeps a core bus network in place, but does it in a way that we can afford.”
He added: “We don’t just give the bus industry bus emergency funding. There’s well over £100 million of annual funding for the bus industry from the bus support grant, from concessionary fares, from school buses.
“So, we are putting significant ongoing investment into the running of the bus network.”
Delyth Jewell MS asked: “You’ve quoted a number of times a figure of £150 million in terms of what’s been spent on supporting the bus industry during the pandemic. That figure includes the bus services support grant, the concessionary fare reimbursement, school transport.
“The last two are statutory duties and they would have to be provided, and both of those payments therefore are for a service that’s supplied, rather than a subsidy.”
The Deputy Minister replied: “It is the amount of money we’ve put in to sustain an industry.
“There wouldn’t have been school contracts when there were no schools open. So, I understand the position the industry are in. They’re in a bind, and we are working with them and talking with them.
“They recognise that without our support there would not be a bus industry in Wales at the moment.
“I realise that they are doing an awful lot of lobbying trying to keep things on an even keel. The reality is that we’re going to have to face changes and they need to and are engaging with us on what that future looks like.”
Later he said: “These are private companies who are free to make their own decisions. The only control we have is we give them all the money. When we don’t give them all the money, we can’t control the decisions.
“But the conversation we’re trying to have with them is, ‘In exchange for a certain amount of money, are we able to reach agreement on which services are more important than others, if you have to prioritise, and to preserve them?’ And that’s an ongoing conversation. “
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