Bus Services Operators Grant regulations: Regulatory Impact Assessment
Introduction
1. Bus Service Operators Grant (BSOG) is a grant paid by the Department for Transport, Local Government and the Regions to the operators of eligible bus services. This assessment concerns regulations which extend eligibility for receipt of BSOG (which replaces a grant previously called "Fuel Duty Rebate") to a wide range of "community transport" services. This change to eligibility involves the need to introduce new regulations under the Transport Act 2000 which will also re-enact the existing eligibility rules set out in previous regulations made under the Transport Act 1985.
Background
2. Under the current rules this grant is only paid to the operators of bus services which are registered with the appropriate Traffic Commissioner as a local bus service. Registration involves the need to state a route and timetable for the service. In addition, to be eligible under current rules a service must be one available for and used by the general public.
3. Against the background of a wish to encourage the role that non-profit making, community transport bodies play in meeting local transport needs, Ministers have decided to extend eligibility for the grant to a range of services provided by those bodies. Such services, which are provided by the bodies concerned on the basis of a permit issued under Section 19 of the Transport Act 1985, in most cases do not follow a fixed route and timetable and are specifically under the Act outside the local bus registration requirements. They are also specifically for use by the particular category of passengers which the body concerned has been set up to serve, rather than the general public.
Consultation on proposals
4. Ministers consulted relevant bodies on their proposals in this regard in the spring of 2001. There was a broad welcome for the proposals and for the categories of service which would become eligible under them. Many respondents wanted a broad definition of eligibility which embraced all services which contributed to the reduction of social exclusion. There was also general support for the administrative arrangements proposed.
Effect of the regulations: the services newly eligible for the grant
5. Taking account of the results of that consultation, and given the wish of Ministers to assist those services which most clearly help reduce social exclusion, the regulations provide that the newly eligible services shall be those operated under a Section19 permit which are used wholly or mainly by:
(a) persons who have attained the age of 60 years;
(b) disabled persons;
(c) persons in receipt of income support under section 124 of the Social Security Contributions and Benefits Act 1922;
(d) persons in receipt of jobseeker's allowance under the Jobseekers Act 1995;
(e) persons suffering a degree of social exclusion by virtue of unemployment, poverty or other economic factors, homelessness, geographical remoteness, ill health or religious or cultural mores;
(f) persons who believe that it would be unsafe for them to use any public passenger services; or
(g) carers or persons under 16 years of age accompanying any of the foregoing.
Risk assessment
6. The "risk" which the regulations address is that without the extra funding provided under them community transport bodies will be unable to play their full part in meeting local transport needs because of shortage of funds. This can be seen both in terms of maintaining their existing services and expanding those services to meet essential transport needs. Fuel costs, which have risen recently, are a major element in the costs of running community transport services; fuel duty is a significant proportion within the total costs of fuel. Community transport operators have argued, and Ministers have agreed, that it is inequitable that the operators of registered local bus service receive the benefit of rebate whilst a community transport meeting the same, or similar, transport need do not.
Business sectors affected
7. This has been described above.
Benefits
8. It is not possible to estimate reliably in advance the size of the total benefit to the community transport sector from these regulations. As indicated above, this extension of eligibility for grant applies to organisations running services under a permit under Section 19 of the Transport Act 1985. Section 19 permits are issued only with respect to services which are operated on a non-profit making basis. In advance of organisations applying for eligibility under the terms of the regulations, the number of organisations who will wish to claim BSOG as a result of the broadening of eligibility is not known with any certainty, nor is the amount of eligible mileage run by them. However, it has been estimated by the Community Transport Association that there are between 1200 and 1800 vehicles operating community transport "dial-a-ride" services. But it is unlikely that all of the services they provide will be eligible under these regulations and some will have relatively low eligible mileage.
9. The benefit to individual organisations of being newly eligible to receive BSOG will depend on the amount of fuel they consume in providing eligible services. Bodies providing such services vary greatly in size, as does the mileage run by them. For the larger organisations, providing perhaps some 0.5million passenger journeys a year, it has been estimated that BSOG may be worth in total some £80,000 or more annually. But this will be untypical and there will be many organisations benefiting by much smaller sums.
10. It should be noted that many small businesses, operating bus services for profit, already receive BSOG by virtue of meeting the existing eligibility requirements.
11. BSOG will be paid to eligible services on the basis of the fuel consumed in running those services and according to the following rates (rates current as at March 2002:
|
36.68 pence per litre |
|
36.68 pence per litre |
|
34.30 pence per litre |
|
34.30 pence per litre |
|
34.30 pence per litre |
|
09.00 pence per kilogram |
12. The DTLR will monitor the take-up of this new entitlement and its impact on the community transport sector. Administrative arrangements will also be kept under review. Costs and securing compliance
13. The new regulations, like the existing regulations, do not cover the administrative procedures which organisations that wish to claim FDR under them should comply. Ministers however made clear in the consultation that they would wish to keep these procedures to the minimum necessary to verify eligibility and entitlement consistent with proper safeguards in the use of public funds. Organisations wishing to claim will need to keep verifiable records of the fuel used in running eligible mileage and make application in arrears (at 6 monthly or annual intervals) for grant entitlement based on those records. The consultation indicated that organisations felt that these requirements were reasonable and did not constitute a significant additional burden. The regulations of course do not have any cost implications for bodies which do not run any eligible services or which do not wish to claim BSOG.
Declaration
I have read the Regulatory Impact Assessment and I am satisfied that the benefits justify the costs.
Parliamentary Under Secretary of State
Department for Transport
Contact point:
Buses and Taxis Division
Department for Transport
Great Minster House
76 Marsham Street
London SW1P 4DR
