Referral of the proposed West Midlands Bus Recovery Grant by the West Midlands Combined Authority

The Subsidy Advice Unit (SAU) has accepted a request for a report from the West Midlands Combined Authority – Transport for West Midlands (TfWM) concerning its proposed scheme for the West Midlands Bus Recovery Grant.

From:
Competition and Markets Authority
Published
12 October 2023
Last updated
22 November 2023 — See all updates
Case type:
SAU referral
Case state:
Closed
Market sector:
Transport
Opened:
12 October 2023
Closed:
22 November 2023

Administrative timetable

Date Action
22 November 2023 Final report published
25 October 2023 Deadline for receipt of any third party submissions (submissions after 5pm on this date cannot be taken into account)
12 October 2023 Beginning of reporting period

Final report

22 November 2023: The SAU has published its report providing advice to TfWM concerning the proposed West Midlands Bus Recovery Grant scheme. The report sets out our evaluation of the TfWM’s Assessment of Compliance of its proposed scheme with the requirements set out in the Subsidy Control Act 2022.

Request from TfWM

12 October 2023: The SAU has accepted a request for a report from TfWM for its proposed scheme, the West Midlands Bus Recovery Grant. This request relates to a Subsidy Scheme of Particular Interest.

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

Information about the scheme provided by TfWM

Bus services are the most essential part of our public transport system, connecting people to jobs, health, education, retail, and leisure, as well as connecting friends, families, and colleagues through affordable transport. The bus network is pivotal to delivering an integrated transport system in the West Midlands, where 80% of all public transport journeys are taken by bus.

Buses are particularly important for those who lack access to a private vehicle, those on the lowest incomes, and for those living in the most deprived communities. The West Midlands has some of the most deprived wards in England (19% of the West Midlands sits in the 10% most deprived areas in the UK) and circa 25% of residents do not have access to a car, with this increasing to 40% in some of our most deprived communities. Ethnic minority communities are two times more likely to have no access to a car (Race Forward 2023). 1.3 million people living in the West Midlands Combined Authority (WMCA) metropolitan area do not identify as being from a White British background.

The Covid pandemic and subsequent cost of living crisis has had a significant detrimental impact on the West Midlands bus market with patronage having moved slowly back upwards and now at circa 89% of pre-Covid levels, whilst costs are some circa 25% greater because of inflation and increases in key operating costs such as fuel and pay. As a result of this, only circa 50% of the pre-Covid bus network (measured in miles) is now deemed commercially sustainable.

Without significant support the bus network in the West Midlands will be drastically reduced causing serious social and economic suffering for the region’s residents and businesses.

It is within this context of devastating cuts to the West Midlands bus market that WMCA seeking to provide a £74.44m scheme to enable bus network security until December 2024. This scheme is aimed at supporting those bus routes that are operated commercially (ie not tendered by the WMCA) and will therefore be available to all bus operators who operate commercial routes in the region with National Express West Midlands being the main beneficiary as they carry circa 94% of all passengers. Security until December 2024 provides the WMCA with an opportunity to pro-actively continue its pursuit of several other activities that will look to address the challenges currently experienced to enable less reliance on external funding beyond that date.

All bus operators in the region will qualify for this scheme if they operate at no less than 98% of current mileage up until December 2024. If an operator chooses to reduce their current mileage by up to 2% that must be coordinated with TfWM and focused on minimising social impacts.

The scheme will end at the end of December 2024.

Information for third parties

If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning TfWM’s proposed scheme for a West Midlands Bus Recovery Grant, please send your comments before 5pm 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-TfWMBuses2023@cma.gov.uk copying the public authority Matthew.Lewis@tfwm.org.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 TfWM. The SAU will send a copy of your submission to TfWM 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 scheme 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 TfWM 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 12 October 2023
Last updated 22 November 2023 + show all updates

  1. Final report published.

  2. First published.

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