Welsh rally against reimbursement cuts

The Welsh Government’s plan to reduce to as little as 46% the reimbursement rate to operators to fund the concessionary travel scheme has been in the headlines. Although the final figures of the cut have yet to be announced, there is understandably considerable concern among Welsh bus operators over what effect this will have. If the cut does go ahead, the consensus is that whatever happens, it will not be good.


No one is more familiar with cuts than Welsh operators it seems. The country has suffered dramatic BSOG reductions and schemes such as the Green Bus Fund simply have not materialised there. With the lack of government funding and the general effects of the harsh financial environment, the effects have already started to take hold, with the lamentable closure of some operators. It has also seen the withdrawal of companies from operating some routes, with the associated job losses and reduction of passenger choice. One of the most recent examples of this is Arriva, which announced in October that it was to close its depots in Aberystwyth, New Quay, Lampeter and Dolgellau, as well as withdrawing several of its routes from 21 December 2013. Ceredigion Council has now stepped in to save these services, temporarily funding them.

With the effect cuts in bus funding have already had, operators are understandably concerned about this latest announcement concerning concessionary fares reimbursements. Owner of Thomas of Rhondda, Glyn Thomas, said, ‘Any cuts they bring in will reduce services, if not cut them off completely.’

Holding a similar view is Henleys Bus Service Secretary, Daphne Henley. She said, ‘I’ve always said, the concessionary fares scheme is a good idea, but what happens when the pot runs dry? With us, we are only a small concern, but if they do go ahead and cut it, then the only thing we can do is increase fares.’

Operations Director at Cardiff Bus, Peter Heath, said, ‘Any reduction in funding on the back of change from BSOG to RTSG this year gives operators very little scope to further the service delivered, it impacts the customers. These days you can’t really pass on the extra cost incurred to the passenger as increased fares, people are very price conscious these days. So the solution has to be achieved through cost saving measures.’

Commenting on what affect he believes these cuts will have, Peter said, ‘At the moment, negotiations are still ongoing and we can’t really predict what will happen as the final figure for any cut is not known.

It’s just a case of waiting for the decision to be made so we know what to do in terms of cost reductions and rates. All along we have made it clear that any cut will have an impact on the level of services provided. At the moment, the Government does not seem to be aware of the magnitude of change that will take place and the impact it will have on jobs if these cuts come into play.’

Lobbying against the cuts

As the plans were announced, General Manager for Lloyds Coaches, Richard Lloyd Jones, decided to take a proactive approach. Being a true statistician, Richard worked out the amount his company would be loosing and presented his findings to Welsh Transport Minister, Edwina Hart. In his letter, it was not just the money he would loose from his own operation that he mentioned, he also highlighted the fact that the cuts would be damaging to the local community, jobs and other businesses because of the lack of transport it would cause. The letter has clearly had some impact on the Transport Minister, as she has arranged a meeting with Richard to discuss the matter in Cardiff at the National Assembly on 9 December 2013.

Richard comes from a local government background, having previously been a Senior Transport Officer at Gwyneth Council, so his understanding of the role transport plays in wider society is considerable. He understands the necessity for cutbacks and the difficulties faced for the Welsh Government and local authorities, but believes that the one just announced by the Government is excessive, particularly taking into account the fact the country has already had BSOG slashed. He believes it will create even higher costs, leading to a situation where services can no longer be run by operators, especially those on a commercial footing. If this was the case, then the Transport Act would dictate that the Government would have to provide a degree of services in ensuring that socially necessary journeys were provided as a replacement, creating an even steeper cost than what is already being paid. It is hoped his experience from a council perspective and from an operational one will help deliver an outcome that is beneficial, or at least not as damaging to the industry.

It is not only Richard who is putting a case to the Welsh Government, so too is the CPT. John Pockett, CPT Director for Wales, has been in discussions with the Government recently over this issue. However, the result of his latest meeting was unfortunately disappointing. John said, ‘We were surprised at the apparent intransigence of the Government after presenting what we thought was a robust case for a reimbursement rate that truly reflects what operators do in carrying holders of concessionary passes. A final figure has not been announced yet, so the effect cannot be fully predicted. However, it is going to have an effect on the industry and the services. The thing to remember is that this is not subsidy, this is reimbursement. The Government’s transport division seems to be reluctant to enter into discussion. This is disappointing because bus operators want to work with our partners in the Government and local authorities for the good of the passenger.’

Last word

Lack of funding for services, particularly when it comes to concessionary fares, is not unique to Wales. The same is happening across the UK, as was exemplified by Roger French in his recent article on the last journeys made on the Moorsbus network (see B&CB 1249, 1 November 2013). It is hoped the efforts of operators and CPT will make the Welsh Government aware of the effect cuts to concessionary reimbursement will have and encourage them to take alternative measures in its quest to save money. After all, surely more people having to pay for the buses they want is preferable to not having them at all.

By Chris Peat

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