Business Baron

Nine routes nobody will pay for

Supported bus service cuts from 2010 took rural evening and Sunday routes first. How the funding works, and why fifty-six days matters.

, Britain

There is a shelter on a green in a Norfolk village with a timetable case on the side of it. For years the case held two sheets: a weekday service that ran five times a day and a Saturday one that ran three.

In the spring of 2011 a third sheet went in beside them, on the operator's headed paper, giving notice that the service would be withdrawn. The notice had a date on it about two months ahead, which is how long the law takes.

The decision had been taken somewhere else, by people who would never stand at that shelter. The name on the notice was the bus company's.

Deregulation split the decision in two

Outside London, an operator has decided for itself what to run since deregulation took effect in October 1986. It registers the service and runs it at its own risk. Nobody grants it the route and nobody guarantees it a penny.

Alongside that sits the other half. Where the market will not provide a service the local authority considers socially necessary, the authority can tender for it and pay an operator to run it. These are the supported services, and in rural counties they are the evening journeys, the Sunday journeys, the school-day extras and a good number of the daytime village routes that would never wash their face commercially.

So one network, running past one shelter, is made of two different kinds of route. They look identical from the pavement. One is a business decision, the other a public spending decision, and only one of them is the operator's to make.

Most of the money on a rural route comes from a public body

The revenue on a village service is not mostly fares.

There is the farebox, which on a rural route is thin. There is reimbursement for concessionary travel, because older and disabled passengers travel free off-peak under the national scheme and the authority reimburses the operator on the principle that the operator should be no better and no worse off for carrying them. There is the tendered payment on supported routes. There is the fuel duty rebate paid to operators, and there may be a school contract sharing the same vehicle and driver.

Three of those five are public money, and from 2010 they were squeezed at once. Local authority budgets were cut and supported service budgets were an early casualty, because they are discretionary in a way that social care is not. Concessionary reimbursement rates were pushed down by authorities working to the same pressures. The fuel duty rebate was cut by a fifth from April 2012.

An operator facing that is not dealing with one bad contract. It is dealing with three revenue lines moving the same way in the same eighteen months.

The cost side does not scale down with the passengers

A route that carries four people still needs a bus, a driver, a depot, an operator's licence, maintenance to a schedule, insurance and the dead mileage of getting the vehicle to the first stop and back.

Drivers are paid by the shift, and shifts have minimum lengths and rules about breaks and rest. A service running twice in the morning and twice in the afternoon may occupy a driver and a vehicle for most of the day while earning for four hours of it. Thinning the middle of a timetable saves almost nothing, because the bus and the driver were bought for the morning peak and are still there at eleven.

That is why removing the subsidy does not turn a supported route into a marginal commercial one. It turns it into a route that loses money every time it runs, and that keeps losing money for as long as it is registered.

The council stops paying on a date, and you keep running

A registered service is a commitment rather than an intention, and cancelling or varying one takes fifty-six days' notice.

The practical effect is the bit that hurts. A council that withdraws funding from April has moved its money on the day it says it has. The operator carries on running the buses, at a loss, until the notice runs out, and the vehicle and the driver's shift cannot be redeployed to anything else until the last day. Every route cut therefore costs roughly two further months of losses before it stops costing anything, and if you cut nine routes, you are funding nine routes out of your own pocket through the summer.

The name on the notice is yours, and the village knows where you live

The commercial consequence of all this is the one that does not appear in a spreadsheet.

The county issues a press release about a budget. The operator puts a sheet of paper in a timetable case. Local papers run the story with a photograph of the shelter, and the photograph has the operator's name in it. Passengers write to the operator, because the operator is the name they know, and the driver who has taken them to the market town for eleven years is the person they ask about it on the last day.

This is not merely unfair, it is commercially live. A small operator's commercial routes usually serve the same towns as its supported ones, and are used by the same families. Goodwill in that setting is a real asset, and so is its absence. Keeping a route the council will not pay for is a genuine option, not sentiment: it costs money now and it buys standing in a market where standing brings passengers.

What happened across a lot of England after 2010 is that the evening and Sunday journeys went first, then rural daytime routes, and in many counties they never came back. Some of the gap was filled by community transport and volunteer car schemes. Most of it was not, and the thinner a network becomes the less useful the surviving routes are, which is a loop that only turns one way.

Where this shows up in the game

The Last Bus is a situation rather than a historical start, which means it is the position you are put in rather than a date in a textbook. You run a bus operator in Norwich from April 2011 with twenty-two registered routes, nine of them paid for by a county that has just stopped paying, and you have eighteen months. It is one of the hard ones, and it does not begin cleanly: the anchor store on the high street is closing, so the town centre traffic that was holding up your commercial corridors is going at the same time as the county's money.

It is scored on profitable months: ten of the eighteen. Those nine routes are loss-making from month one, and withdrawing a registration takes fifty-six days, so every cut carries two more months of losses before it saves anything. Keeping a route the council will not pay for earns local reputation, which slowly raises demand on your commercial routes, and the vehicles released by a cut can be sold, redeployed or parked. Cutting everything unprofitable reaches the target quickly and costs you the reputation the epilogue then reports, which is a choice the page for The Last Bus states plainly rather than hiding.

The seed is fixed at 600015, so the same nine routes lose their funding in the same month for everybody, and one attempt can be compared with another. Ironman rules apply: one save, and what happens happens.

Read next