Stagecoach legal challenge to Welsh Government

Stagecoach has threatened a legal challenge over plans by the Welsh Government to make cuts to the country’s concessionary travel scheme, describing them as ‘brutal, flawed and unlawful’. Last month, the Welsh Government 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 company has given the country’s authority a deadline of 1 April to re-think its decision to set a new rate at which bus operators are reimbursed, or face a potential judicial review.

Legal advice Stagecoach has received from Herbert Smith Freehills suggests there are 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 ten local authorities in Wales who are responsible for implementing the concessionary travel scheme in areas covered by the company’s operations, pointing out that following the Welsh Government’s new guidance would be unlawful. 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. Legal letters have also been sent to local councils, who have been warned that they have an individual duty to assess whether the Welsh Government’s new guidance and modified arrangements are justified.

MD of Stagecoach in Wales, John Gould, 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. 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. 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.’




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