National Express set for £5m hit to bus services

TRANSPORT group National Express has said it expects to take a £5m hit to its bus revenue next year as a result of the Government cutting a grant to bus operators.

In its Comprehensive Spending Review last year, the coalition announced a 20% reduction in the Bus Service Operators Grant from April next year. The announcement also included a review of the concessionary reimbursement scheme and a cut in local funding for transport.

The Birmingham based firm said it had made its views known to the Competition Commission as part of a consultation but it was yet to receive a response.

In a statement, National Express said: “We estimate the adverse impact from BSOG to be approximately £4m for 2012 and £5m in a full year. We have made our submissions to the Competition Commission review of the UK Bus industry and await its report, due later in 2011.”

The reduction comes at a time when the company, despite reporting an improvement in profits, continues to see its bus passenger volumes struggling.

In its full year results, the firm said it made a pre-tax profit of £160m last year, up 38% on the previous year’s £116m. This came despite a £0.5bn reduction in revenues.

It said its bus operation continued to do well and was optimistic for the year ahead, however, volumes are still down.

In its results statement, the company said passenger levels were “subdued” and down 4% during the year. It said the reduction reflected the “lower levels of economic activity” in both the West Midlands and its Dundee regions.

“More targeted marketing, together with additional measures to encourage travel, should improve growth in the bus business, whilst enhancing margins further,” it said.

“Working with Centro, the local integrated transport executive, we are investing in 600 buses over the next five years, which will drive capacity and, we expect, patronage on the core network (Travel West Midlands).”

It is also investing in hybrid buses as part of a commitment to greener vehicles and to promote greater use of more environmentally friendly public transport.

There was better news for the Midland Metro, which is also operated by the firm.

The tram service made a profit during the year for only the second time since its inception and achieved a reliability rating above 99% and a 98.5% punctuality rate.

The figures will be a further boost to the service following the Government’s decision to part-fund the £130m extension of the service to New Street Station to the tune of £75m.