Form

Bus Service Operators Grant: guidance for commercial transport operators

Updated 23 July 2024

Applies to England

The Bus Service Operators Grant (BSOG) is a discretionary grant paid to operators of eligible local bus services to help them recover some of their fuel costs. The amount each bus operator receives is based on the amount of fuel they use.

BSOG aims to benefit passengers by:

• helping operators keep fares down
• enabling operators to run services that might otherwise be unprofitable and be cancelled

Bus operators in receipt of the grant must keep accurate records of the eligible kilometres run and the fuel consumed in operation of local bus services so as to satisfy officers of the Department for Transport (DfT) that the figures on the claim are correctly stated.

It should be noted that, while DfT’s intentions are to avoid placing unnecessary administrative burdens on bus operators, officers of DfT or Driver and Vehicle Standards Agency (DVSA) will periodically visit bus operators to check that claims comply with the appropriate legislation and to ensure that accurate records are being kept in support of claims.

Conditions of eligibility

The following is a brief description of eligibility for commercial bus operators wishing to claim the grant for services operated in England and is for guidance only.

To qualify for the grant a bus service must be registered as a local bus service, a service run under the London local service permit or exempt from the need to have such a licence.

Local services (other than schools’ services and those for elderly or disabled people) will qualify for the grant if:

1. At least half the accommodation is available and the service is regularly used by the general public, stopping places are situated where the public is likely to use them and all the fixed stopping places (whether marked or otherwise generally recognised) are located where they are likely to be used with reasonable frequency.

2. In any section of the area of operation of the service where there are no fixed stopping places, the arrangements for determining when and where passengers may be taken up and set down are such that members of the general public may take advantage of them with reasonable frequency.

3. The public can make a single journey between any 2 stopping places at a fare that is not designed to deter them from using the service (for example, a long distance service on which very high fares are charged for short journeys could be ineligible for the grant).

4. In the case of a flexible service, the advance booking arrangements are such that they do not act as a deterrent to members of the general public wishing to make a single journey that is otherwise provided for in the particulars of registration.

5. The arrangements for paying the fare are not a deterrent to using the service.

6. There are no signs or descriptions giving the impression that only particular categories of people can travel on the vehicle.

7. Members of the public can inform themselves about the service, the places served and times of operation.

8. The service is not a tendered service.

Exceptions

The main exceptions to these conditions are bus services provided or secured:

• by education authorities under section 509 of the Education Act 1996
• for persons who are over 60 years old or disabled

These services must meet the conditions of eligibility, except that:

• they will qualify provided that some seats are available to the general public and the service is regularly used by the public
• the stopping places to or from which the service is mainly provided (for example, a school) need not be used by the public
• condition E will not apply (full conditions of eligibility are available in the BSOG claim form)

The following services also do not qualify for BSOG:

• excursions and tours – ‘excursion’ or tour’ means a service on which all the passengers travel together on a return journey
• services that are intended to operate for less than 6 consecutive weeks and are not emergency services
• services substituting a bus for a rail service that has been temporarily discontinued
• services whose primary function is to transport travellers between rail stations, airports or sea terminals and their dedicated car parks
• services operated in conjunction with an employer (for example, a factory) to take employees to and from the workplace
• services that are exclusively for the use of pupils, students or employees of a school or college (not open to the general public) – see the section of this guidance on schools services for more information
• services operated under franchise to Transport for London
• community transport (s19) services operated in-house by English local authorities
• various specialist services
• services supported under tender by English local authorities, except incentives for smartcard, automatic vehicle location, low carbon emission vehicles and/or zero emission vehicles
• commercial services operated within the Transport for Greater Manchester boundary, except incentives for smartcard, automatic vehicle location, low carbon emission vehicles and/or zero emission vehicles

Services using vehicles designed to carry 8 people or less will only qualify if the service is operated to a timetable and they satisfy all the conditions A to F in the BSOG claim form.

BSOG Rates

The current rate of BSOG is:

Fuel type	Unit payable	BSOG rate from 1 January 2014
Diesel	Pence per litre	34.57
Biodiesel	Pence per litre	34.57
Bioethanol	Pence per litre	34.57
Biofuels – used cooking oil	Pence per litre	34.57
Unleaded petrol	Pence per litre	32.66
Natural gas used as road fuel	Pence per kilogram	18.88
Road fuel gas other than natural gas	Pence per kilogram	18.88

Incentives

Smartcard and automatic vehicle location (AVL) incentives

Operators may receive an 8% increase in their BSOG rate for vehicles that have operational smartcard systems installed and a further 2% increase for vehicles that are fitted with AVL equipment.

Low carbon emission bus (LCEB) incentive

Operators of vehicles that hold a low carbon emission certificate may be eligible for an additional 6p per kilometre for those vehicles.

A low carbon emission vehicle must have 22 or more seats and be able to achieve a 30% reduction in its greenhouse gas emissions compared to an average Euro 3 diesel bus of the same passenger capacity.

Zero emission bus (ZEB) incentive

Claims from 1 April 2023

Operators that run a service under a section 19 or section 22 license and use vehicles weighing up to 3.5 tonnes are now entitled to claim a ZEB incentive on that service without requiring a ZEB certificate or summary sheet.

If operators wish to claim under this exemption, they must supply a copy of the vehicle log book (V5C) demonstrating the vehicle has zero tailpipe emissions, and a self-certification that the vehicle has no other internal combustion engine on board. This can be done by email that accompanies the claim.

Operators of vehicles that hold a zero emission bus certificate may be eligible for a 22p per kilometre rate of BSOG for those vehicles.

Eligible buses must:

• meet the normal BSOG rules
• demonstrate zero tailpipe emissions
• have no internal combustion engine (for example, electric and hydrogen buses)

This will need to be verified by certification, which builds on the existing testing and certification process for the LCEB incentive.

Vehicles for which operators receive the ZEB incentive are not eligible for any other incentives.

Services serving schools and other educational establishments

This section of the guidance about services that serve schools and other educational establishments explains:

• the criteria for when you can claim BSOG and when you cannot
• what evidence you need to provide to support a claim

There are penalties for claiming BSOG for services that are not eligible.

Services you can claim BSOG for

Operators can claim BSOG for a school bus service so long as the following apply. 

The service must be: 

• open to the general public 
• registered with the Office of the Traffic Commissioner as a ‘normal stopping service’ 
• listed on the journey planner of the operator and the local authority and appear on the traveline website 

Open to the general public 

You can only claim BSOG for sections of a service that are open for use by the general public.

Any boarding and alighting restrictions should not act as a deterrent to use by the general public on the section of a service for which BSOG is claimed.  

If part of a route runs within school grounds and is therefore out of bounds to the general public, eligibility would cease from the last stop before the school to the first stop after. In such circumstances operators should provide a copy of the map sent to the Traffic Commissioner when registering the service, outlining which part of the route is closed.  

If there is any doubt around eligibility, the department may request a bus boarding exercise is undertaken by the Driver and Vehicle Standards Agency. 

A ‘normal stopping service’

The service must be registered with the Office of the Traffic Commissioner as a ‘normal stopping service’.

The BSOG team will not accept services registered as ‘schools or works’ services. If the traffic commissioners’ information is out of date, it is up to the operator to ensure it is updated correctly. 

If the registration of a service is incorrectly shown as ‘school or works’ on the traffic commissioners’ website, the BSOG team will accept the following as proof of an error:

• a copy of the PSV355 for an existing service
• a copy of the PSV350 for a newly registered service

This can be sent to the team at BSOG@dft.gov.uk.

Operators must not include any financial data when submitting this information to the team. 

The operator must ensure that the error in the traffic commissioners’ records is rectified. Failure to do so may result in services being removed from the claim and the overall payment reduced or stopped. 

Listed on journey planner websites 

The service must be listed on the journey planner of the operator and the local authority and appear on the traveline website.

Operators’ websites and other literature such as timetables / fare tables may indicate that a service serves a school or college, but it must be made explicitly clear that it is also open to members of the general public. Operators should remove any material that may imply that it is a restricted (closed) school service.  

Normal stopping services that happen to serve schools and that are open to the general public should appear in the bus operators’ own journey planners and in local authority journey planners where they have a journey planner separate to traveline.  

Operators must provide details of the service to the local authority so that it can be listed on traveline. It is the operator’s responsibility to make sure that the service is listed.

How to claim

When completing the certified claim form PSV311E or estimate claim form PSV310, operators providing eligible (open) school services must complete the declaration at section 2) iv) of the claim form to show details of all eligible services. The same service information will need to be entered at section 5 of the claim form.

Services not eligible for BSOG

Operators cannot claim BSOG for ‘closed’ school services.  

Definition of a ‘closed’ service

A ‘closed’ home-to-school service is a service providing travel to and from a school or other educational establishment that can be used only by a person who is: 

• receiving primary, secondary or further education or training at the school or educational establishment 
• supervising or escorting any such person while they are using the service 
• involved with the provision of education or training at that school or educational establishment 

This includes services: 

• commissioned by local authorities, whether or not the service is provided free of charge
• commissioned by schools or other educational establishments 
• provided by transport operators (commercial travel routes) that cannot be boarded by members of the public at the same time as they are carrying children or young people to their place of education 

Penalties for non-compliance

The Department for Transport may withhold whatever percentage of an operator’s quarterly payments they consider appropriate, including complete withdrawal of quarterly payments on estimate, and may seek to recover any monies paid on estimate where: 

• estimates appear unreasonably high in view of the operator’s performance in recent years
• an operator consistently overestimates
• an operator fails to submit a certified claim (PSV311E) within the time allowed

The Secretary of State for Transport may withhold payment of BSOG completely where: 

• records in support of operators’ claims are not held or are incomplete – see paragraph 26 of Annex A of BSOG claim forms (PSV310 and PSV311E)
• operators have not informed the department of any change in circumstances, for example, cancellation of services, which was not foreseen at the time the estimate on form PSV310 was submitted, and which has had a material effect on the amount of grant due – see paragraph 14 of Annex A of BSOG claim forms (PSV310 and PSV311E)
• operators have previously provided false information or misled the department
• operators have themselves, or in connection with others, been accepted onto the BSOG scheme in the past and have left the scheme owing the department money
• the department has reason to believe that the claimant has not complied with any condition imposed by the Secretary of State under section 154(3) of the Transport Act 2000 – see Annex A of BSOG claim forms (PSV310 and PSV311E)
• any of the services to which a claim relates is not an eligible bus service within the meaning given by section 154(5) of the Transport Act 2000 – see Annex B of claim forms (PSV310 and PSV311E)

The Secretary of State may adjust overpayments or underpayments by whatever means they consider appropriate. The Secretary of State may also carry out credit checks on operators where they consider this to be appropriate.