Portsmouth City Council, Subsidy to First Hampshire & Dorset Limited (FirstBus)

Portsmouth City Council, Subsidy to First Hampshire & Dorset Limited (FirstBus) is a proposed subsidy totalling up to £2.8 million in the form of grant funding to FirstBus from Portsmouth City Council (PCC). The funding will be used for the acquisition of 16 zero emissions buses (ZEBs) which will replace existing diesel buses, as well as related charging infrastructure to support the use of the ZEBs. The grant funding was originally secured from DfT under the ZEBRA scheme.

Our key takeaways from the Subsidy Advice Unit (SAU) report are:

• In the absence of market failure, assessments should aim to identify any applicable equity objectives and ensure that they closely follows the Statutory Guidance (3.51-3.55) when explaining and evidencing the objectives.
• Assessments must clearly outline how the value of a proposed subsidy was determined and why this was considered to be the minimum necessary amount for the subsidy. Where a subsidy is part of multiple tranches, this might include explaining the individual role of the subsidy alongside the other tranches. In this case, the assessment could have provided further detail about the extent of the DfT scrutiny of the value for money of PCC’s ZEBRA bid.
• Assessments should refer to and evaluate the policy objectives throughout the assessment, as well as considering both the long and short-term effects of the proposed subsidy on competition and investment.

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