Councils struggle with rising school bus costs in Wales
BUS and coach companies in Wales are charging much higher prices to operate school and public bus services, putting council budgets under further strain.
Councils regularly invite bids for contracts for home-to-school transport and off-peak or rural bus services. Now the number of companies responding has fallen and prices have risen. Some existing contractors can no longer provide all of their contracted services.
Councils are also finding that taxi companies are hit by labour shortages.
Having lost five bus companies in seven years, Pembrokeshire council plans to buy a company in the hope this will avert a price rise of £300,000 a year.
The Coach and Bus Association Cymru (CaBAC) said its members were not profiteering, but were caught in a “perfect storm” of price rises, labour shortages and loss of activities which previously crosssubsidised council contracts.
The Association of Transport Coordinating Officers Cymru said the cost of contracts and availability of operators had become an issue for many Welsh councils.
Chair Richard Cope said: “Operators have had to increase wages to retain and secure drivers, and are also having to pass on the impact of fuel and other associated costs, which have risen sharply. Those doing school transport don’t have the luxury of having other work to incorporate into these runs, as private hire has diminished almost completely since the pandemic and full costs are being included in tenders, rather than as a proportion of a full day’s work.
“Throughout Wales, this has led to a doubling of contract costs and also a shortage of vehicles and operators.”
A Pembrokeshire council report this month explained that feedback from local authorities across Wales revealed they were being quoted “two or three times the average cost”.
The law requires councils to provide home-to-school transport for eligible students. Their schools transport budgets were being squeezed before the pandemic, with more and more students qualifying for Special Educational Needs transport.
Councils have no duty to subsidise public bus services but most do so because of buses’ importance to many people and communities. The rising costs of bus contracts could lead to more services being withdrawn.
CaBAC vice-chair Bev Fowles said: “Nobody has ever made a fortune from school [bus] contracts. Local authorities have been fortunate in that it’s been a cut-throat market. Many companies have learned to their cost that you can’t operate a school contract one hour in the morning and one hour in the afternoon.”
Drivers would not work for just those hours, so companies relied on finding work for drivers and vehicles at other times. Private hire, such as coach holidays and trips to events, helped to sustain their businesses but dried up during Covid lockdowns.
“Cross-subsidisation used to take place,” said Mr Fowles. “Covid has blown that apart. Now operators are saying, ‘This is what it costs us.’ We’re not helped by spiralling costs. Fuel costs have gone up 30% since this time last year. Wage costs have rocketed, because we have to retain employees.”
Covid-19 had temporarily prevented new drivers from qualifying, and many drivers had retired during the pandemic. That left a vacuum which would continue for a long time, he said.
Jamie Pritchard, deputy leader of Caerphilly council, said: “The council is experiencing a shortfall in available operators that are able to fulfil the number of contracts required, with some contracts being tendered and subsequently re-tendered multiple times.”
A Cardiff council spokesman said prices for school bus and coach contracts had increased between 30% and 40%, due to increased wages and fuel costs and the loss of work for school trips and visits during the pandemic.
Wrexham council said demand for services had outpaced capacity in the taxi, private hire, coach and bus sectors since the onset of Covid-19.
“Transport operators across all sectors providing tendered services to Wrexham council have reported a shortage of drivers due to a combination of reasons, including those leaving the industry for employment elsewhere, the onset of long Covid and the delays experienced with the DVLA in processing driving licence applications and providing driving test slots,” said a spokeswoman.
“On a weekly basis, local transport providers are reporting that they are unable to fulfil contract obligations such as home-to-school transport routes or commercially operated local bus services due to a shortage of drivers, resulting in either journeys being cancelled or doubling up for school transport services with associated higher operating costs that are being passed on to the local authority.”
Experience so far suggested that Wrexham council would incur an additional cost per contract of up to £10,000 per annum for a seat wheelchair-accessible coach. Wrexham council’s deputy leader David A Bithell said support from the Welsh Government and council had enabled transport providers to survive after passengers virtually disappeared in the pandemic. “Demand continues to rebuild, albeit slowly, but there are new and very different challenges faced now by transport providers, who sometimes simply cannot provide drivers or vehicles. This places additional pressures on budgets in order to maintain statutory transport obligations,” he said.
THE funding of local government services is immensely complex and subject to all kinds of pressures, some of which are easier to predict than others.
It should come as no surprise that the cost of publicly funded transport services is increasing at well beyond the rate of inflation, which itself is higher than it has been for many years.
Local authorities have a legal obligation to provide home-toschool transport for pupils with special needs. This often entails the provision of taxis on a daily basis.
At the same time, as part of a longstanding commitment to protect the connectivity of rural communities, councils subsidise many bus routes that would otherwise not be financially viable.
Both categories of spending should be considered inviolable.
Such a position does not, however, come without consequences.
For a variety of reasons, the cost of providing taxis for pupils with special needs and of buses in rural areas is rising sharply. The taxi firms and bus companies that supply such services are themselves having to deal with increased costs.
This is partly due to a large rise in fuel prices. Another major factor is the severe shortage of drivers.
Since the start of the pandemic, there have been long periods when buses and taxis have both faced massive reductions in the number of passengers, with the result that many drivers have either left the transport industry for good or changed their patterns of employment.
On top of that, Brexit has resulted in large numbers of mainly eastern European drivers returning to their home countries.
In line with the principle of supply and demand, the consequent shortage of labour has led to the need to increase drivers’ pay.
While many will rightly argue that drivers were previously underpaid, the unavoidable decision to pay them more has an additional impact on council budgets.
It’s doubtful whether policy-makers in Westminster expected such an outcome, but they should now take it into account when deciding how much money to allocate to local authorities in England, and by extension to the devolved administrations.
The rising costs of home-toschool transport and rural bus services illustrate the kind of financial pressures faced by local authorities when providing a comprehensive range of public services.
Those arguing for council tax freezes need to take account of that and think again.