Witnesses gave evidence remotely before MPs
Transport Select Committee is warned of many serious financial pressures placing coach operations at risk, compounded by a lack of support
The Transport Select Committee met on Wednesday, 24th March 2021, where some of the difficulties facing the coach industry were laid bare.
Graham Vidler, CEO of the Confederation of Passenger Transport, made the industry’s case alongside Nigel Skill, Chairman of Skills Group of Nottingham, Candice Mason, Director of Business at Masons Mini Bus & Coach Hire, and Michael Pearson, Transport Manager at TM Travel. This evidence session was followed by another with Baroness Vere, the minister with responsibility for coaches, and Nigel Huddleston MP, Minister for Tourism.
Mason noted that her operation has not transported a private group since 18th of March 2020. She said: “As of the end of this month, our losses will stand at over £1m. We’ve been lucky to access the grant from the first lockdown, £10,000 and a £4,500 grant more recently.
“We had to take out a £225k loan which we have to start paying back in June. We’re pretty scared about how we will afford to do that.”
Masons considered refinancing its entire fleet, but was told it was a high risk business.
Pearson highlighted TM Travel’s investment in Euro VI coaches, which it had acquired to keep up with government expectations. “The finance alone on those three vehicles is £20,000 per month,” he said. “Any grants just scratch the surface. I don’t think there’s a clear outline for our sector to get back going.”
Skill stated that his company’s losses are somewhere in the region of £3.2m, largely down to the fact Skills Group has invested £19m in Euro VI coaches since 2016. He said at times, only a single minibus has been in service from a fleet of over 100 vehicles.
“The concern is that the very businesses which are vulnerable are those who have embraced Euro VI and invested heavily,” he said. “Those business which haven’t taken on Euro VI commitments are probably in a stronger position financially. Ironically, it’s those that are forward thinking and well managed that are suffering disproportionately.”
Skill added that when lockdown eased, 40 vehicles were providing school transport. However, this was a ‘double-edged sword’ because the vehicles would usually be carrying out other work between transporting school children. Little if any money was made running these services.
The bulk of Skills' coach fleet has not moved during the pandemic
The operator also applied for a CBILS loan (Coronavirus Business Interruption Loan Scheme). Due to various consultancy fees and audits required by the bank, getting access to the £250,000 the company wanted cost about £35,000. It would have cost almost £50,000 had the auditor not discounted its rates.
Vidler highlighted the scheme to support coach operators in Scotland, believing it to be well designed.
He explained: “It pays up to £12,000 per vehicle, pays more for businesses with newer vehicles and targets business with a higher proportion of turnover from tourism. Applying a similar scheme in England and Wales would cost £100-150m, but give a real boost to the sectors’ attempts to start up again over the summer.”
Graham also asked for clarity and consistency on the roadmap out of lockdown, to build confidence in coach operators. He added that the UK coach say ‘coach deserts,’ where all the local operators collapse and residents cannot access any coach services.
Asked about local authority funding available to assist them, Mason said she was told priority had to go to bus companies providing school transport. Pearson claimed much of the money in his region went to Go North East, where it helped the operator purchase new buses as well as coaches which would compete with his own operation. TM Travel received no assistance.
In the later session of the meeting, Baroness Vere said the government had to focus on providing public transport to essential workers.
She said: “Coaches provide a valuable service which is very important, but during a pandemic it is not essential travel in many cases.”
Questioned about the prospect of ‘coach deserts,’ Vere said she expected the market to fill any gaps in due course.
Asked why funding has not reached the coach sector, Nigel Huddleston MP said he was ‘alarmed’ to hear this. He said: “The additional restriction grants - £2bn of grants now – are meant to go to the coach sector. Operators should be getting them. I have said that in the House of Commons.
“MPs shouldn’t have had to lobby for funding for the coach sector. Something went wrong there, but hopefully we have corrected that now.”