Bus industry closes in on Government rescue deal

The taxpayer could fund drivers to work on a rotating basis, in order to keep services running

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Prime Minister Boris Johnson at the wheel of a London bus
Boris Johnson's administration is supporting sections of the transport sector

The Government is set to offer the bus industry a bespoke wage deal, allowing critical services to continue during the coronavirus lockdown.

Operators will be allowed to rotate furloughed staff whose wages will be bankrolled by the taxpayer, according to sources.

The move is part of a wider package of measures currently being hammered out. An announcement from the Department for Transport is expected imminently.

The bus sector says it is losing tens of millions of pounds a week as passenger numbers plummet.

But operators are still running approximately half of normal services, requiring around 50,000 drivers to be retained.

Baroness Vere, the bus minister, has been holding talks with companies over a package of financial support for the industry.

The Prime Minister’s transport policy adviser Andrew Gilligan has also been directly involved, sources said.

Allowing those staff that have been furloughed - temporarily laid off - to be rotated on 80pc pay is one of three key demands from the industry.

Operators want a commitment from Westminster that councils and local authorities will stick to budgeted payments in line with guidance from the Cabinet Office earlier this week.

Because half of the sector’s staff will need to be retained, additional financial support will also be required to cover losses from a sharp reduction in fares, sources said.

Bus companies previously called on the Government to agree to a £1bn rescue package, asking for staff costs to be funded.

Chancellor Rishi Sunak announced last Friday that businesses could furlough workers on 80pc of pay - costs that would be funded by the Exchequer. 

But the bus industry is understood to have told ministers that it would not be able to access some of the money because roughly 50pc would need to be retained to deliver services. 

The prospect of the Government stepping in to help bus companies comes a day after it doused hopes of industry-wide support for the aviation sector.

Mr Sunak wrote to airlines and airports saying that they must prove they have exhausted all options of financial assistance before asking for state support.

On Monday, the Department for Transport effectively re-nationalised the railways, offering train companies the option of running services on a fixed fee basis for the next six months or handing the keys to networks back to the Government.