Tuesday, 31 January 2012

Reality of Government Funding Cuts Begins to Dawn

It seems that the whole country is slowly beginning to appreciate the potential impact of the government’s public spending cuts.

I blogged about the situation in Cornwall recently and then immediately stumbled upon three more cases where cuts in public subsidy were leading to cuts in public services.

The first was a story which predicted that thousands of passengers in South Yorkshire could be stranded without a bus service in April as bus companies struggle to come to terms with reductions in their Bus Service Operators’ Grant.

The BSOG is an annual payment from the Government to subsidise the cost of fuel and is worth £12 million to South Yorkshire ’s transport companies each year – but the payment is being slashed by a fifth in April, which equates to a budget cut of £2.4 million.

South Yorkshire ’s Passenger Transport Executive has warned that a reduction on this scale would have a ‘big impact’ on services, and it seems they are right. First Group are already preparing for a 5% fare increase and Stagecoach have admitted that they’ll have to work hard to minimise the impact on passengers.

Things look no better in North Wales where passengers are facing the familiar double whammy of fare increases and service reductions.

Councils have been angered by the Welsh Government decision to impose a 27% reduction in subsidy for bus services from this April. That equates to cuts totalling £500,000 to the Local Transport Services Grant (LTG) and the Bus Service Operators Grant. The announcement of the cuts resulted in a rare show of unity as councillors, bus operators and passengers stood shoulder to shoulder to jointly blast the Welsh Government for its decision.

For its part, the Welsh Government said they’ve had to make some tough choices in what are increasingly harsh economic times. And there’s few that would deny that – including, one assumes, the good people of Preston who were no doubt upset to hear that their local bus operator Rotala, the owner of Preston Bus, is intending to review its fares in the Spring to tackle rising costs. And we all know what that means.

The stock market-listed company said that it needed to look again at its fare levels in April as it tries to cope with cuts in Government funding. Yes, you’ve guessed it, they’ve been hit by a reduction in Bus Services Operators’ Grant.

Rotala reflected the universal concern about the effects of the government’s cuts by admitting that bus operators all over the country are having to review their fares in light of their substantial rises in operating costs resulting from the subsidy reductions.

Fares on Rotala’s routes in the West Midlands rose 5.6% at the start of the year after a careful review and the company said it will be carrying out a similar review in Preston shortly.

The only glimmer of good news comes from Rotala’s acquisition of new hybrid buses which, it says, have been delivering improvements in fuel consumption of up to 50% on some routes. Eleven more hybrid vehicles are due to enter service soon and Rotala said they will be making a further application to the next round of the government’s Green Bus Fund to help buy more.

It’s doubtful whether any of the passengers will be see the benefits of the savings, though.

So – will there be any more stories about government subsidy cuts leading to bus service cuts? Oh, yes. I have a feeling that we're going to hear an awful lot more yet.

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