Bus Services Bill [HL] — House of Lords, 2016-07-20
Topic: Transportation
Tariq Ahmad (Conservative, Centre-right): My Lords, as a Minister, one gets used to looking in front of one and not behind. I apologise to my noble friend for not realising that he wished to speak and for attempting to speak before he did. I thank the noble Baroness for her contribution. Her proposed new clause seeks to devolve the bus service operators grant, or BSOG as it is known, to local authorities, and would require authorities to consider joint funding of subsidised local bus services in partnership with specialist and community operators I know that the issue of funding for bus services was raised by many noble Lords during earlier debates on the Bill, and I agree that it is a key issue that we need to tackle. BSOG is a payment made to bus operators by my department to help support local bus services outside London. Since 2013-14, some £40 million a year of BSOG has been devolved to local authorities outside London, rather than paid to the bus operators. This money is for the services that local authorities subsidise themselves through the tendering system. However, the remaining BSOG funding is paid to bus operators for commercial rather than tendered services, reflecting the fact that in the current model of bus-service delivery bus operators are responsible for providing our local bus services and deciding which services to run I agree that where an authority takes on the financial risk associated with providing bus services through establishing a system of franchising they should have access to the BSOG funding that would have been paid to bus companies in the area. So BSOG funding will be devolved to local authorities where franchising is established. However, it is important to remember that where franchising is not established the deregulated market remains, with bus operators responsible for devising and running local bus services For many bus operators, BSOG can be the difference that ensures a local bus service is viable, and this can be especially true in rural areas—a concern expressed by several noble Lords. Such commercial services, which operate with no contractual relationship with local authorities, often run across local government boundaries. So decisions taken by one local authority, if BSOG funding was devolved to it, could very easily have a significant adverse impact on services in another area. Devolving BSOG to all authorities as a matter of course could therefore have significant implications. I should explain that we are already reviewing the BSOG system with the aim of ensuring that funding is targeted where it is most needed. I envisage that we will launch a consultation later this year on how the system could be reformed The noble Baroness made a couple of points about BSOG being a poor incentive for fuel efficiency. A number of existing top-ups to BSOG incentivise particular improvements, including environmental improvements. I agree that a fuel-based system sends unhelpful signals. That is an issue we will be looking at in our review and the consultation to which I referred I hope this reassures the noble Baroness that we are thinking about the BSOG system with the aim of ensuring that we get the best out of the funding available. However, I would not want to pre-empt that exercise by setting out changes on the face of the Bill. However, I agree that resources can be used more effectively where services are planned together, and where specialist and community operators are involved. This is something we are exploring through our total transport pilots as we want to ensure we make the funding available go as far as possible I reassure the noble Baroness that we will continue to look further at the extent to which this policy can be pursued and championed, and whether it is something that can be considered further in the Bill. Given that reassurance and explanation, I hope that she is minded to withdraw her amendment.