Bus fares to rise as cuts loom

Brian Souter
Brian Souter
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BUS fares could increase by 10 per cent and services slashed by a tenth as a result of planned cuts to Government subsidies, one of Sheffield’s two leading operators has warned.

MPs on the House of Commons’ Transport Select Committee heard national funding for concessionary fares is likely to be reduced by as much as £102 million from £1 billion a year.

This is in addition to reductions in council-subsidised bus services and a 20 per cent cut from 2012/13 in the Bus Service Operators’ Grant, which rebates bus operators for fuel duty.

In its evidence to the select committee, Stagecoach said the total subsidy cuts amount to between £254m and £441m per year, which equates to between seven and 13 per cent of the entire turnover of the bus industry.

This is enough to wipe out the profit margins of many operators and will inevitably lead to fare hikes and service cuts, it is claimed.

Stagecoach, run by entrepreneur Brian Souter, who recently visited Sheffield to launch extra services, told MPs: “A general rule of thumb would suggest a 10 per cent cut in public funding would necessitate a 10 per cent increase in fares, coupled with a 10 per cent cut in services and would result in a 10 per cent loss in passengers.”

Warning of job losses, it added: “Cuts in bus services will reduce employment in the bus industry and also reduce investment in new buses with consequent implications for the industry’s suppliers.

Brandon Jones, Commercial Director of Sheffield’s biggest bus operator First, said: “This reduction in BSOG will inevitably put pressure on the business.

“We are working hard to increase passenger numbers to minimise any impact on bus fares or route changes and hope to be in a position to mitigate any impact on customers by the time that the BSOG changes take effect in April 2012.”