Bus Service Operators' Grant
What is the Bus Service Operators' Grant?
Bus Service Operators’ Grant (BSOG) is one of the main means of funding to support bus services from Central Government. Although Government has occasional schemes to fund specific bus-based projects on a bidding system, BSOG continues to be the only universal and continuous form of Government financial support for bus services.
BSOG is paid to bus operators at a flat rate based on miles and energy costs used on local services. BSOG is fiscal recognition of the fact that the bus is a sustainable and inclusive mode of transport.
BSOG is a grant paid to operators of eligible local bus services and community transport organisations to help them recover some of their fuel costs. The amount each bus company receives is based on their fuel consumption.
The aim of BSOG is to benefit passengers. It does this by helping operators keep their fares down and enabling operators to run services that might not otherwise be profitable and might be cancelled.
How do operators use the grant?
Operators claim BSOG using a heavily audited process which is based around their declarations on mileage operated, fuel use and an average mpg figure for their fleet.
WMCA already has responsibility for the payment of BSOG in respect of tendered subsidised services but not in respect of commercial services.
The payment process for commercial BSOG is currently the responsibility of the Department for Transport (DfT) for the entire country.
As well as administering the payments, this team also acts as a point of contact for bus operators and carries out monitoring on an ongoing basis to ensure that services that operators claim for meet the requirements of BSOG.
Devolving the grant
Given that WMCA already administers BSOG in respect of subsidised services (as well as the Network Stability and Network Planning Funds) there is a clear case to devolve commercial BSOG directly from DfT to the WMCA. This would match arrangements in Greater Manchester and West Yorkshire.
BSOG would be administered at a local level by the WMCA and continue to be paid to West Midlands’ bus operators.
The transfer of powers to enable WMCA to make payment of commercial BSOG has now been agreed as part of the West Midlands Trailblazing Deeper Devolution Deal with Government.
The new functions relating to BSOG will also allow WMCA to set policy to enable the grant to be directed to support the Government’s and WMCA’s shared priorities; to support important local bus services and reduce environmental impacts through facilitating the transition to zero emission buses.
However, WMCA will need to wait until the DfT consults on national policy reforms for BSOG before it is able to exercise this element.
Consultation and next steps
In order to request the devolvement of the power from Government, the WMCA has consulted with the seven constituent authorities that make it up, these being Birmingham City Council, Coventry City Council, Dudley Metropolitan Borough Council, Sandwell Metropolitan Borough Council, Solihull Metropolitan Borough Council, Walsall Council and City of Wolverhampton Council.
The Constituent Councils gave their consent to the Scheme and Governance Review and the WMCA Board formally agreed it at their October meeting.
Following this decision, the Mayor will now write to the Secretary of State for Transport to request the devolution of the power. If approved by the Secretary of State, an Order would be laid in Parliament to devolve the function in due course.
The seven constituent local authorities will be asked to give further consideration to a draft Order over the coming months and in advance of a further decision by WMCA Board.