RISING costs and reduced passenger numbers are putting bus services at risk, unless City of York Council plugs gaps in declining government funding, a report warns.

Some bus operators face “catastrophic losses”, unless they axe services, or City of York Council (CYC) steps in with subsidy, as it is already doing in cases, it says.

The stark warning comes in a report, prepared for a meeting of the council executive on Thursday, July 13, which says bus services have faced a ‘challenging environment’ since the pandemic.

Bus passenger numbers which were 16 million a year and steadily increasing since 2014 have dropped a fifth since before the pandemic, and services cost the city council £70,000 a day to operate.

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Bus operators have seen fuel costs increase 38 per cent since the pandemic and staffing costs rise 28 per cent. Staff shortages have also been fuelled by many drivers retiring.

The city council has received £17.4 million through the central government Bus Service Improvement Plan (BSIP) for fund infrastructure improvements and service support. It currently spends about £2.7 million subsidising services in the city.

Central government support has been ‘vital’, but this is due to plummet by at least 30 per cent in the next two years. Beyond Summer 2025 is a “potential cliff edge” as the funding mechanism changes.

The report said: “As the support is withdrawn the commercial viability of these services is becoming challenging.”

The report also said: “Some operators of CYC tendered services have advised that they are making substantial losses at the current contract prices.”

It means they “face the difficult choice of whether to breach contracts in order to protect their business from catastrophic losses".

“This is something which the council will need to address either proactively or reactively and is likely to lead to cost increases and/or reduced service levels on tendered services,” the report continued.

Bus operators have already threatened to withdraw some services they consider unviable, leading the council to offer emergency subsidies to keep them going in the short term.

Among them, First York has announced some reductions in services from July 2. Other planned cuts to First York Services have been offset thanks to council support funding short-term contracts.

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The report said: “Without additional external assistance, the council does not have sufficient financial influence on its own to make much overall difference to the economic viability of the bus network in the long term.”

The council increasingly relies on government funding to support its buses, so its needs to remain aware of the March 2025 “cliff edge, beyond which no identifiable funding source exists to keep many of these services operating".

The report added: “If there is no additional funding identified, this will have a significant impact on bus services in the city at that time.”