Stagecoach threatens legal action against Welsh Government

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The operator claims impending concessionary fare cuts do not comply with EU law

Stagecoach has threatened a legal challenge over plans by the Welsh Government to make changes to the country’s concessionary travel scheme. The company has given the Welsh Government a deadline of April 1 to re-think its decision to set a new rate at which bus operators are reimbursed, which would result in a £24m cut in the scheme’s budget, or face a potential judicial review.

Legal advice Stagecoach received from Herbert Smith Freehills suggested key failings in the process the Welsh Government has followed. The Government may also be liable to pay compensation for violating EU law.

Lawyers have also written to 10 local authorities in Wales who are responsible for implementing the concessionary travel scheme in areas covered by Stagecoach operations, pointing out that following the Welsh Government’s new guidance would be unlawful.

The Welsh Government confirmed a three-year funding package of £189m for its free bus travel scheme across Wales. The budget has been cut by over 11% from the £213.3m package provided over the past three years. The scheme provides free travel to more than 720,000 concessionary pass holders in Wales. The planned concessionary funding cut also follows the Welsh Government’s 25% reduction in Bus Service Operators Grant in the last 12 months.

Legal experts suggested the Welsh Government has erred in law by unilaterally capping the scheme to fit within an allocated budget rather than following the statutory ‘no better, no worse off’ principle.

CPT Cymru wrote to Welsh Transport Minister, Edwina Hart, last month to express its concerns. Bus operators warned the cuts would undermine public transport across the country, damage local communities and hit jobs and the economy. They warned the impact of the funding cut would be even worse after taking account of inflation.

John Gould, Managing Director of Stagecoach in Wales, said: “The Welsh Government has so far refused to listen to warnings from bus operators, passengers, public transport campaigners and community groups. Legal action is a last resort and we have written to the Welsh Government to give them an opportunity to re-think their decision. We want to protect people from the devastating impact of these brutal, flawed and unlawful cuts.

“The Government has broken the key stated principle that bus operators are properly and fully reimbursed for the costs of participating in the mandatory scheme.

“It has effectively rewritten the rules to its own specification and to suit its own purposes while dressing up the changes as the result of an independent review. The damage will be felt all across Wales and people are rightly angry.

“From housing estates to the high street, the Government’s cuts are an attack on daily life in Wales. It will directly lead to significant cuts to bus services. There will be an even wider impact as the fall-out will hit the most vulnerable and affect living standards for the poorest in our communities. Ministers will be collectively responsible for job losses and cutting people off from accessing vital education, employment and health facilities.”

A Welsh Government spokesperson said: “The new rate, recommended by an independent review, maintains the principle that bus operators who take part in the scheme are no better and no worse off. Any operator who believes they may be adversely affected by a local authority’s reimbursement arrangements has the right to appeal to Welsh Ministers.”