2.74
The ongoing revenue sources identified in the Assessment, including the Mayoral precept and revenue earn-back, were considered credible funding sources for the partnership options. The Assessment concluded that the partnership options could be considered feasible and affordable if funding of the required value from these ongoing revenue sources were allocated.
Summary of the impact of Covid-19 on the Financial Case Transition period revenue impacts and mitigation options for the Proposed Franchising Scheme 2.75
The impact of Covid-19 is principally related to uncertainty over the levels of bus demand and associated farebox revenue in Greater Manchester and the extent of the operated mileage that will be run. In Scenarios 1 and 4, there is a substantial decline, and in Scenario 3 there is a very substantial decline, in farebox revenue in the transition period. Scenario 2 only sees an increase after several years, so there might still be reductions during a potential transition to the Proposed Franchising Scheme.
2.76
As a result of the uncertainties caused by Covid-19, it is not currently considered possible to provide a different central forecast of bus demand and a precise funding requirement for the Proposed Franchising Scheme. The Scenarios, therefore, represent possible rather than forecast changes compared with the Assessment more generally.
2.77
Table 2 below estimates the potential unmitigated change in farebox revenues accruing to GMCA compared with the Assessment under each Scenario over a transition period up to 2025/26, assuming a one-year implementation deferral compared to the Assessment. Table 2: Estimates of the potential unmitigated change in farebox revenues
GMCA's potential (unmitigated) change in farebox compared with the Assessment
Scenario 1 Scenario 2 Scenario 3 Scenario 4 Note: Proportion of farebox accruing to GMCA
2022/23 2023/24 2024/25 2025/26 £m £m £m £m (4) (3) (10) (5)
(16) (4) (43) (17)
(33) 7 (97) (29)
(43) 31 (141) (30)
9%
35%
74%
100%
Total over the period £m (96) 31 (292) (82)
2.78
In the event that downside changes to farebox revenues materialise, GMCA would need to consider further mitigations and/or funding in order for the Proposed Franchising Scheme to remain affordable. These mitigations would be of the same kind as those set out in the Assessment and previous reports to GMCA (increase fares and/or reduce the network and/or increase funding contributions), but the scale of any or all of the options may need to change.
2.79
The potential mitigation options, during transition, if Government funding is reduced or withdrawn would include: •
Concessionary reimbursements. Local authorities, in conjunction with additional Government funding, are currently being advised to pay concessionary reimbursements (and subsidised services payments) at pre-Covid-19 levels. If concessionary reimbursements were once again paid on a usage basis, they could generate additional resources of at least £30 million, including £12.5 million previously provided for
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