Referral of the proposed subsidy to First Hampshire & Dorset Limited by Portsmouth City Council

The Subsidy Advice Unit (SAU) has accepted a request for a report providing advice to Portsmouth City Council concerning its proposed subsidy to First Hampshire & Dorset Limited.

From:
Competition and Markets Authority
Published
3 March 2025
Case type:
SAU referral
Case state:
Open
Market sector:
Transport
Opened:
28 February 2025

Administrative timetable

Date Action
11 April 2025 SAU’s report to be published
14 March 2025 Deadline for receipt of any third-party submissions
28 February 2025 Beginning of reporting period

Request from Portsmouth City Council

28 February 2025: The SAU has accepted a request for a report from Portsmouth City Council concerning the proposed subsidy to First Hampshire & Dorset Limited. This request relates to a Subsidy of Particular Interest.

The SAU will prepare a report, which will provide an evaluation of Portsmouth City Council’s assessment of whether the subsidy complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.

Information about the subsidy provided by Portsmouth City Council

Portsmouth City Council (the Council) is proposing to provide a subsidy of up to £2.8 million to commercial transport operator First Hampshire and Dorset Limited (Firstbus). The subsidy will partially cover the cost of the replacement of 16 diesel buses with zero emission buses (ZEBs) and the provision of related charging infrastructure to support the use of the ZEBs. The subsidy is financed from the Department for Transport’s Zero Emission Bus Regional Area (ZEBRA) 1 Fund.

The policy objectives of the subsidy relate both to remedying a market failure which has arisen as a consequence of negative externalities alongside:

  • decarbonising the transport system as part of Portsmouth City Council’s 2030 Net Zero target

  • improving air quality especially in connection to the Class B Clean Air Zone in the city

  • strengthening working relationships between both the local authority and bus operator for the long-term benefit of bus users and the wider community

  • encouraging modal shift by increasing the attractiveness of the bus

The Council consider that this subsidy cumulates with two earlier awards provided to FirstBus of £6.6 million and £3.4 million in 2024. The three awards, when cumulated, total £12.8 million and will secure the delivery of a project comprising a total of 62 ZEBs for Portsmouth.

The project will reduce carbon emissions and improve air quality both directly, from the operation of the ZEBs; and indirectly from the electric buses displacing the 62 Euro VI type diesel buses currently operating within the existing Portsmouth Clean Air Zone.

The subsidy payment it will receive will be subject to:

  • First Bus funding any deficit in the project costs

  • the ZEBs operating on the agreed routes for at least 5 years

  • the buses to be replaced by the ZEBs being cascaded through the First Bus fleet to remove outstanding Euro IV & V elsewhere within the First Bus South fleet

  • additional public benefits being secured, namely the ZEB charging infrastructure being available for use by other users

Information for third parties

If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the proposed subsidy to First Hampshire & Dorset Limited, please send your comments on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Please send your submissions to us at SAU-PortsmouthZEBRA2025@cma.gov.uk copying the public authority: BSIP@portsmouthcc.gov.uk.

Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).

Notes to third parties wishing to make a submission

The SAU will only take your submission into account if it can be shared with Portsmouth City Council. The SAU will send a copy of your submission to Portsmouth City Council together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with Portsmouth City Council using the email address provided above.

The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.

For further details on confidentiality of third-party submissions, see ‘identifying confidential information’ in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Contacts

Updates to this page

Published 3 March 2025
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