Tuesday 31 March 2020 12:01 pm

Coronavirus: Government poised to unveil rescue deal for bus industry

Transport secretary Grant Shapps has said that a sector-specific deal for the UK’s bus operators will be announced shortly after passenger numbers collapsed nearly 80 per cent.

Speaking to Sky, Shapps said that he was “working very hard on a package” for buses, having announced a set of emergency measures to protect the UK’s struggling rail franchises last week.

Read more: Stagecoach and Go-Ahead scrap dividends over coronavirus

“It’s quite clear we have to have the buses up and running”, he said: “That’s actually how the majority of people – 55 per cent – who use public transport travel”.

He added: “I will be saying more about [the deal] shortly”.

At a meeting with the transport select committee last week, Shapps revealed that bus passenger numbers had decline 78 per cent since the coronavirus crisis began.

In the meeting, Shapps revealed that the bus services operator grant, which is worth about £251m a year, was still being paid despite the reduction in services.

The Financial Times reported that Shapps has written to industry members confirming that the grant would continue to be paid on the basis of estimated service levels before the outbreak began.

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He also said that he was developing guidance for local transport authorities in order to continue services, which are necessary to get many essential workers to their jobs.

The industry is also entitled to apply for pre-announced Treasury measures to defer VAT payments and protect workers’ pay.

Earlier this month industry body the Confederation for Passenger Transport (CPT) asked the government for a £1bn bailout in order to protect the sector.

The calls included requests for the government to guarantee budgeted sources of income for bus and coach operators and to support up to 80 per cent of staff costs.

Read more: Rail operators awarded new contracts for Great Western and Southeastern franchises

The CPT said: “This will enable major operators such as Arriva, First Group, Go-Ahead and Stagecoach – as well as numerous smaller bus companies – to maintain routes vital for taking NHS staff and other key workers such as refuse workers, cleaners and supermarket staff to their places of work.  

“But without extra funding, the bus network outside London could disappear. A rescue package now will ensure an industry vital for the country remains in place once the crisis in over”.  

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