Milton Keynes Council leader agrees to spend £700,000 on propping up struggling bus companies

Bus companies struggling to survive the coronavirus lockdown will be given £711,152 to keep them going.

The money comes from Milton Keynes Council’s parking account, which has itself collapsed from about £1 million each month to ‘virtually nothing’.

“Effectively this is a double hit on our balance sheet,” said council leader Pete Marland (Lab, Wolverton) at a virtual meeting on Tuesday.

Cllr Marland said the Government has provided some funding but he added: “We don’t know how long that funding will last.”

Bus companies like Arriva are normally paid for the number of concessionary fare paying passengers. This decision will see them receive payments in advance for May and June.

Cllr Marland, in a decision that took less than two minutes to confirm at a delegated decisions meeting broadcast live on YouTube, outlined the difficulties facing the bus companies.

“We are doing this in order to support the public transport sector at this time because some services have reduced from about 70 to 95 per cent,” he said.

“Obviously that’s hugely impacted the revenues of bus companies and without this support it’s likely that bus companies would face severe difficulties in being able to maintain a viable operation.”

Steve Hayes, the council’s head of transport revealed the dramatic decline in passenger numbers and the threat to the industry in his report to Cllr Marland.

He said: “Impact varies from route to route, but data received to date suggests passenger numbers in April were between five per cent and 20 per cent of normal levels.

“This threatens the viability of the bus industry as revenue has been virtually eliminated.

Services are still running at around 50 per cent of normal levels in order to provide transport for key workers and essential journeys, which costs money.

The council says it has worked closely with operators to adapt their networks to provide the best services.

A covid-19 financial authorisation board (FAB) has been created by the council but because the amount of money is more than a certain amount, the decision has to be made by the elected leader.

Bus operators will have to provide their accounts to the council so that any overpayments can be reclaimed.

But the council says having a healthy bus industry is vital to the city.

Mr Hayes concluded his report with a stark warning.

He said: “It is worth considering that despite these proposed payments there is no certainty that operators will return services to pre-Covid levels or even remain solvent over the coming months, particularly as the recovery in patronage is likely to be slow.

“This is recognised by the Department for Transport (DfT) and further advice is anticipated on Government support for industry in the longer term.

“This decision, therefore, covers payments for May and June 2020 only, anticipating that further advice will be forthcoming for future months.”