Welsh Government dodges High Court case after admitting free bus travel cuts were wrong
Government has now agreed to a less severe cut in the budget for this year and next
The Welsh Government has averted a High Court case by accepting that its planned cuts to funding for free bus travel were wrong.
In November, it emerged the proposed cuts would trigger a judicial review, which would not happen soon enough to prevent bus services being scaled back to reflect the reduced payments.
This appeared to fall on deaf ears, because bus companies were formally told in March that their total payments for carrying holders of free bus passes would be 11% lower over the next three years – with the budget reducing by £2m each year.
Several companies, including Stagecoach, began proceedings in the High Court because the law obliges the government to ensure that bus companies are no worse off than they would be if the free travel were not available.
The government has now agreed to a less severe cut in the budget for this year and next. It has also accepted that the budget should rise in line with inflation next year, rather than reducing.
As predicted in November, bus passengers are suffering a backlash to the original 11% funding cut. Cardiff Bus made major changes in April, followed in May by First Cymru’s service reductions in the Llanelli area.
On 20th July, Stagecoach South Wales will close its Brynmawr depot and reduce its overall business by 10% – moves which were set in stone before the government changed its mind.
A Welsh Government spokeswoman said: “Local authorities determine the reimbursement rate they pay to bus operators that carry concessionary pass holders for free, consistent with their obligation to ensure that operators are ‘no better and no worse off’.
“The Confederation of Passenger Transport in Wales, representing bus operators, has proposed overall reimbursement levels for 2014-15 and 2015-16 that would enable local authorities to meet that obligation.
“Following detailed negotiations, the Welsh Government issued guidance to local authorities on 27th June that reflects the CPT’s proposals.”
The CPT put proposals to the government in November, after consultants it had commissioned calculated the payment rate which would leave bus operators no better or worse off.
This figure was higher than recommended by government-appointed consultants, and in December a joint study – analysing both consultants’ reports – was ordered.
Eluned Parrott AM, Welsh Liberal Democrat transport spokesperson, said the Welsh Government had been forced into a “humiliating climbdown”.
She said: “The lack of foresight when it comes to bus planning in Wales has had an appalling impact in the last two years.”
Conservative Shadow Transport minister Byron Davies said: “That Mrs Hart and her officials ploughed ahead with these irrational cuts – despite the clear warnings – is nothing short of incompetent.”
When Stagecoach South Wales announced its major cuts last April, it said the reduced payments for carrying pass holders followed ministers’ decisions to cut 25% from bus grants last year while also reducing grants to councils for public transport.
Since the Welsh Government launched the free travel scheme in 2002, bus operators have received almost 74% of their average single fares for each pass holder they carry.
The money comes from local authorities but the councils are reimbursed by the Welsh Government, which sets the budget. Last year’s budget for all bus operators was £73.2m.
This year’s budget was to have fallen to £65m but the government and bus industry have accepted that it should be £67.75m.
Next year’s total is likely to be about £69m.