ATCO survey reveals fall in bus contract replacement costs

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However, ATCO claims the news masks severe problems for socially necessary services

Costs of replacing local bus contracts have fallen for the fifth consecutive year according to the results of the Association of Transport Co-ordinating Officers (ATCO) 2013 Price Expenditure and Competition (PEC) Survey. However, the body said the ‘good news masked severe problems for socially necessary bus services.’

The sixteenth annual PEC survey shows that the cost of replacing local bus contracts fell by an average of 3.6% in the past 12 months. 91 out of 130 Local Transport Authorities outside London responded to the survey, which ATCO says gives a unique snapshot of transport spending by local councils. This falls into three categories – contracts for socially necessary local bus services, education transport and Special Educational Needs (SEN) transport.

In more detail:

  • In order to maintain existing levels of support for socially necessary local buses, budgets would have to increase by an average of around 4.5% whereas cuts are already being made;
  • Some 26% of local authorities overall said they will cut services by March 2014 in order to stay within budget;
  • 27% of local authorities reported an increase in the rate at which commercial bus services are being de-registered, with 60% seeing a similar rate to the previous year;
  • The local authority spending cuts are offset in part by the continuing falls in contract prices, but formerly commercial services also meet social needs leading to calls for additional contracted services;
  • Costs of replacing school transport contracts fell by an average of 7.3% in the past 12 months to September 2013, for the seventh consecutive year with local authorities estimating that they would need a 2.1% budget growth to retain existing school transport service levels; and
  • The cost of replacing SEN transport contracts fell, again for the seventh consecutive year, by an average of 3.2% but local authorities estimate that they will need 2.5% budget growth next year to retain existing SEN transport service levels.

ATCO Chairman David Blainey said: “At first glance this is good news, but the reality is that cuts in local authority spending in line with Government policy mean that authorities still cannot afford to support all the services for which there are real social needs.”

Vice Chairman of ATCO Bus Executive Julian Heubeck added: “The sting in the tail is that the survey is based on contracts agreed up to March 2013. There is real concern that the rate of reduction in both commercial and supported bus services has increased in the current year in response to the cost pressures faced both by the commercial bus operators and by the local authorities.”

ATCO has also published the results of the 2013 Benchmarking Survey which was carried out for the seventh consecutive year with 94 out of 130 authorities responding. Key indicators from the Survey include:

  • Annual spend on local bus services per head of population over the last seven years has fallen by 3.5% to £5.83, although the peak was £6.74 in 2011;
  • The cost of concessionary travel paid by local authorities over the last seven years (principally for pensioners) has increased by 40% to £76.35 per qualifying person; and
  • Education and SEN transport costs per pupil were £780 and £3,971 respectively, around 19% and 9% higher than in 2007.

Chairman of the ATCO Education and Specialist Transport Executive Ian Gwenlan said: “Although both authorities and their contractors have adopted innovative approaches to meeting requirements whilst controlling costs, inevitably we cannot continue to meet the same levels of service within ever reducing budgets.”