BSOG + HMG = BBAF2 #2

 Episode 2 : A Farewell Present for David Brown?

Like cars, motorbikes, trains and planes, buses need fuel. Despite experiments with running buses on hydrogen, electricity, recycled chip fat or even reconstituted pig poo, most buses use "diesel"; or, more correctly, "fuel oil". [Useless trivia department : Trolleybus operator Derby Corporation used to refer to its diesels as "Oiler Buses"]

Standard practice is to full up as the bus returns to its depot each night. Whilst operators may buy in bulk or play the "futures" market they, too, pay tax on their fuel. They recover most of the VAT as bus fares are zero rated. As a chilling aside, remember that a government can increase VAT on bus fares from 0% to 20% without further legislation; it is a commonly held misconception to think that bus fares are exempt from VAT! Food, likewise, is subject to VAT but the rate is currently at 0%. That rate can also be changed (i.e increased) at the whim of a politician.

As a subsidy to the bus industry, successive governments have generously provided for "Fuel Duty Rebate" so that operators can reclaim the Excise Duty payable on diesel. [We are all taxed twice at the pumps!]. fbb can only vaguely remember the complications of making a claim each year. The paperwork still causes occasional nightmares many years after selling his bus business!

In part one of a "cunning plan" to save money, the government renamed the scheme Bus Service Operators' Grant in 2002 and, over the years, the amount of duty that you could reclaim has been reduced from 100% to 60%.

Up steps smiling Norm [Minster Norman Baker] with phase two of the "cunning plan". In the future, says Norm, we will devolve this fuel grant jobbie to the Local Authorities by giving them and not the bus operator, the cash. Then the various councils can decide how best to spend it. That way, as with OAP free travel, we are insulated from the flak and any political problems. Actually, Norm didn't say that last bit; it's an fbb opinion! [Useless trivia department : "flak" is an abbreviation derived from the German "fliegerabwehrkanone" meaning "aircraft defence cannon".]

As a forerunner to Norm's "cunning plan", 2012 saw the introductions of "Better Bus Area" schemes. 24 areas qualified for grants for schemes to improve the environmental impact of public transport and/or to encourage growth in passenger numbers. One scheme, for example, provided money to support the fitting of WiFi on First's buses in the Portsmouth area.

There is/was even a bus advertising the facility!

Incidentally, the First Bus spinmeisters were quick to claim this is "their" initiative (fair enough) but they seemed unable to bring themselves to tell Portsmothians that, actually, taxpayers had largely footed the bill.

And so to phase 3 of smiling Norm's "cunning plan".

To sweeten the pill of devolving money for fuel tax rebate to Local Authorities, Norm announced a second "tranche" of funding; but this time with a spoonful of sugar to help the medicine go down. [Useless trivia department : "tranche" is simply the French word for "portion" or "slice"; as in "pain en tranches".] In preparation for devolving the rebate money, bus companies and local authorities could form "partnerships", submit a claim and get 20% extra as a bonus..

So, a few days ago, Norm and his chums put out this press release:-

I am pleased today to launch the bidding process for designation of Better Bus Areas, and to announce that Sheffield will act as a trail-blazer for Better Bus Areas as part of its city deal. Last March in "Green Light for Better Buses" I announced my intention to reform the way in which we directly support the bus market through the Bus Service Operators Grant (BSOG). A key part of this is the development of Better Bus Areas.

South Yorkshire Passenger Transport Executive has been working with the department to develop Sheffield as a trailblazer Better Bus Area and I am pleased to announce that their application, which forms part of Sheffield's city deal, has been successful. The Better Bus Area will increase funding for buses in Sheffield by £530k this financial year and just under £1.6m in future years.

So initially, in Sheffield, the partnership gets the bonus as a sweetner before the fuel tax rebate system is changed.

Unfortunately, despite several visits to Sheffield recently, Norm has repeatedly forgotten his departmental issue Leica and thus couldn't quite manage a picture of a Sheffield bus to illustrate his departmental bounteousness. Upon close examination we can see that one of his "job experience" minions has pasted out both destination and registration number. Can any blog reader identify route and location?

But in its press release, SYPTE did better with two buses and lots of important people!

Far left rear is First's Fearnley; front row from the right we have Paul Lynch (Stagecoach), departing director David Brown (SYPTE), Dave Alexander (First Bus) and, clutching the first draft of his ministerial memoirs, smiling Norman Baker.

Clearly this extra money is good news for someone. It should be good news for the residents of Sheffield. Let us hope that it is more than (a) a boost to the profits of the bus companies, (b) a "cunning plan" to save government money in the long run and/or (c) cash for extra staff the PTE. To be fair, everyone concerned is very positive about the passenger benefits, but, as they say, the proof of the pudding is in the eating.

And fbb does like his pudding!

Spotted dick - yummy!

BSOG = bus service operators' grant

HMG = Her Majesty's Government

BBAF2 = better bus areas fund number two

 Next Bus Blog : Sunday 3rd March 

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