Crumbs! So that’s pretty bad, then. Or is it?

We now know that local authorities face cuts of 28 per cent over four years. What impact might we expect in terms of bus services?

The 28 per cent is front ended in 2011/12 but otherwise almost evenly spread year on year at about seven per cent per annum. Transport inflation, according to the CPT, is currently running at 3.4 per cent, the lowest annual increase since the CPT published its figures. Budgets would therefore need to rise by over three per cent just to keep pace. If applied to bus services, the seven per cent cut in real terms therefore equates to 10.4 per cent.

But that’s not all. Expect most local authorities to spare much if their education and social services budgets. Between them, these account for 60 per cent of funding (they do in Bournemouth, anyway). If protected, the seven per cent needs to come off the remaining 40 per cent. This equates to a cut of over 15 per cent.

Next, when considering the remainder of the budget after schools and social care, assume that authorities will look to make cuts where they are perceived to hurt least. Here, traditionally, bus subsidies have been a soft target. Could we therefore see supported bus services budget cuts of the order of 18 to 20 per cent?

Of course, all this is but speculation. What isn’t is BSOG. First, the good news. No change next year. This avoids the immediate impact of fares increases, service cuts or both. It safeguards jobs. Now, the bad. A 20 per cent cut from April 2012, with the new rate applying for three years (at least there’s no further cut expected as was believed. This will be some relief at this).

There are those who can applaud this as a victory. And, operators can now begin to budget properly, though the volatile base fuel cost is still an unknown. Yet, this is designed merely to give operators time to react to a reduction in 18 months’ time. Not that they need more than eight weeks if service changes are required: the entire industry has (or should’ve) already planned its strategy, as it was expecting an April 2011 cut plus further cuts beyond. But, a welcome relief all the same. Unlike kickstart and rural bus grants, both to go.

And then there are even heavier cuts expected in local infrastructure, including presumably in bus related infrastructure that might have cut a swathe through traffic jams or make the passenger experience that much more palatable. If all this contributes to more traffic & congestion, the industry when adding the BSOG related revisions, faces in pincer movement with an acceleration of two self-fulfilling trends: passenger decline and increased cost. With inevitable results.