Stagecoach threatens legal challenge over "brutal, flawed and unlawful" Welsh Government bus concessionary travel cuts
The company has given the Welsh Government a deadline of 1 April to re-think its decision to set a new rate at which bus operators are reimbursed, which would result in a £24 million cut in the scheme's budget, or face a potential judicial review.
Legal advice Stagecoach has received from Herbert Smith Freehills suggests key failings in the process the Welsh Government has followed. The Government may also be liable to pay compensation for “violation of EU law”.
Lawyers have also written to 10 local authorities in Wales who are responsible for implementing the concessionary travel scheme in areas covered by Stagecoach operations, pointing out that following the Welsh Government’s new guidance would be unlawful.
Stagecoach today attacked the "brutal, flawed and unlawful cuts" by the Welsh Government, which last month confirmed a three-year funding package of £189m for its free bus travel scheme across Wales. The budget has been cut by over 11% from the £213.3m package provided over the past three years.
The scheme provides free travel to more than 720,000 concessionary pass holders in Wales, including armed forces’ personnel and veterans. Under the scheme, bus operators in Wales should be reimbursed for the full costs of participating in the compulsory scheme.
However, legal experts suggest the Welsh Government has erred in law by unilaterally capping the scheme to fit within an allocated budget rather than following the statutory “no better, no worse off” principle.
CPT Cymru, the Welsh branch of the Confederation of Passenger Transport, which is the umbrella body for the Welsh bus and coach industry, wrote to Welsh Transport Minister, Edwina Hart, last month to express its concerns. Bus operators warned the cuts would undermine public transport across the country, damage local communities and hit jobs and the economy. They said the impact of the funding cut would be even worse after taking account of inflation.
John Gould, Managing Director of Stagecoach in Wales, said: "The Welsh Government has so far refused to listen to warnings from bus operators, passengers, public transport campaigners and community groups. Legal action is a last resort and we have written to the Welsh Government to give them an opportunity to re-think their decision. We want to protect people from the devastating impact of these brutal, flawed and unlawful cuts.
"The Government has broken the key stated principle that bus operators are properly and fully reimbursed for the costs of participating in the mandatory scheme. It has effectively rewritten the rules to its own specification and to suit its own purposes while dressing up the changes as the result of an independent review. The damage will be felt all across Wales and people are rightly angry."
Mr Gould added: "From housing estates to the high street, the Government's cuts are an attack on daily life in Wales. It will directly lead to significant cuts to bus services. There will be an even wider impact as the fall-out will hit the most vulnerable and affect living standards for the poorest in our communities. Ministers will be collectively responsible for job losses and cutting people off from accessing vital education, employment and health facilities."
Legal letters have also been sent to Blaenau Gwent and Torfaen Councils, Cardiff Council, Newport City Council, Monmouthshire County Council, Caerphilly County Borough Council, Merthyr County Borough Council, Neath Port Talbot County Borough Council, Powys County Council, Bridgend County Borough Council, and Rhondda Cynon Taf County Borough Council.
The councils, who are responsible for the scheme in areas where Stagecoach runs bus services, have been warned that they have an individual duty to assess whether the Welsh Government’s new guidance and modified arrangements are justified.
The planned concessionary funding cut also follows the Welsh Government's 25% reduction in Bus Service Operators Grant in the last 12 months, which has already increased the cost of bus travel for passengers and adversely affected the viability of bus routes.