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DfT announces changes to Bus Service Operators' Grant

Wed 22 April 2009 | Back to news list | More bus news

The Department for Transport has announced that bus operators achieving a six per cent improvement in their fuel efficiency will enjoy increases in the Bus Service Operators' Grant (BSOG) paid to them. In these cases, BSOG will increase from April 2010 by three percent.

The Secretary of State, Geoff Hoon, said that a 3% increase in the BSOG rate will be payable, from 1 April 2010, to any operator achieving a fuel efficiency improvement (as measured in kilometres per litre) of 6% compared with the “base year”. In addition, an additional payment of 6p per kilometre will be paid for all kilometres operated by a low carbon emissions bus (LCEB) from 1 April 2009.

This payment is intended to level the playing field for operators of LCEBs by providing them with an equivalent level of BSOG to that which they would have received had they operated a standard diesel bus.

The LowCVP which has been active in the discussions about the revisions to the BSOG issued a press release welcoming the announcement which, the Partnership says, removes the inherent bias against fuel efficient low carbon buses. However, the provision of a 6p per kilometre additional payment paid for all kilometres operated by a low carbon bus provides only the equivalent BSOG payment that a diesel bus would receive. It does not provide the incentive promised by the Secretary of State when he announced the change in December 2008. 

The LowCVP Director, Greg Archer commented: “The Secretary of State needs to go further to realise his commitments on BSOG to incentivise low carbon buses. This represents a missed opportunity to ensure that low carbon buses are given the stimulus needed to be adopted throughout the UK and play a significant role in tackling climate change. What is now needed is for bus operators to be given access to funds already announced to demonstrate low carbon vehicles. Without this the market for low carbon buses is likely to remain very small.”

The Government said that the Bus Subsidy Advisory Group will continue to meet to discuss the other measures announced by the Secretary of State last December, including longer term options for change.

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