West Midlands Combined Authority, West Midlands Bus Network Support Grant Scheme

The West Midlands Combined Authority, West Midlands Bus Network Support Grant Scheme, is a proposed subsidy, worth £50 million, is part of a bus recovery package for operators of commercial registered local bus services within the West Midlands.

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

• Assessments should consider any economic spillovers which may occur in maintaining networks/the service when relying on the positive externality argument. It should also be considered whether this argument would be better stated as an equity objective.
• Where relevant, assessments should explain clearly that the estimated costs of providing certain services by tender is only indicative and why the Scheme would be less costly than direct tenders.
• Assessments should provide specific information relating to the potential impacts on competition and investment. This could include, if relevant, assessing the scale of the scheme relative to the market, impacts on any flow-level competition or comparisons to similar networks in bordering areas.
• Assessments should quantify any beneficial impacts and if possible, negative impacts of the Scheme.
• Assessments should weigh the benefits of the Scheme against identified negative impacts instead of against the negative impacts in the ‘do-nothing’ scenario.
• In relation to SPEI requirements, assessments should detail how end of period reviews will be undertaken to ensure awards are restricted to the minimum necessary and to enable excess funds to be recovered.

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