Bus Service Operators Grant

The Bus Service Operators Grant (BSOG, and formerly Fuel Duty Rebate) is a scheme that refunds some of the Fuel Duty incurred by operators of registered local bus services in the United Kingdom. In 2006 the grant repaid 81% of duty paid on ultra low sulphur diesel fuel, and 100% for bioethanol, biodiesel and liquefied petroleum gas.
Current rates.
Rates as per 1 April 2012 (in pence per litre).
Eligibility.
The grant is available for operators of local bus services available for use by the general public which operated on public roads. The definition of 'local' is that stops should not be more than 15 miles apart.
The grant is also available to operators of vehicles with Small Bus Permits (Section 19) when providing services for some groups of passengers:-
Some longer UK coach services, such as the Oxford Tube claim the grant for part of their routes. The Oxford Tube initially made a stop at Lewknor on the M40 motorway in order to qualify for the grant between Oxford and that point. Subsequently, it has created additional demand from passengers joining at Lewknor.
History.
Fuel duty rebate.
The Fuel duty rebate was established under section 92 of the Finance Act 1965. Further legislation was included in section 19 of the Transport Act 1985. Fuel Duty Rebate (FDR) was available only on complying local bus services. Until 1994 the level of FDR was 100% By 1999 the rebate had been reduced to about 67%.
Bus Service Operators Grant (BSOG).
The terms were changed by Section 154 of the Transport Act 2000. Fuel duty rebate was renamed the Bus Service Operators Grant (BSOG), even though it is still as a rebate paid at a set rate per litre of fuel. In 2002 the 'Bus Service Operators Grant (England) Regulations 2002' extended the grant to cover a wider range of community transport service operators.
Under the Coalition government's Comprehensive Spending Review (CSR) the grant was kept at 81% until April 2012, when reduced by 20%. The current payment rate is the lowest ever percentage since the rebate's inception in the 1960s.
In autumn 2012 the DfT held a consultation on bus subsidy reform in which it presented options to switch some or all of the rebate away from the bus operators that incur the fuel cost, and pay it instead to local authorities. It opened on 13 September 2012 and closed on 12 November.
The Government considered reducing BSOG in 2013 but following a joint campaign by bus operators, local authorities and campaign groups, decided against. However, some eligibility criteria were tightened.
A 2014 economic appraisal carried out by the firm KPMG on behalf of the group Greener Journeys found that for £1 spent on BSOG, between £2.50 and £3.50 is generated in benefits, including wider economic and social impacts.
In 2015, again there were fears that BSOG would be cut as part of the Government Spending Review, which combined with cuts to local authority funding, would have threatened many bus routes. Campaign and industry groups campaigned against this, and in the Autumn Statement in November, it became clear that BSOG would be retained.