THE FUTURE of Devon’s £2 bus service depends on a new funding deal, the boss of Stagecoach South West has suggested.

While passengers pay the fixed fare for single journeys, the extra money the transport company would usually charge is reimbursed to them by central government.

The scheme, introduced in January 2023 by the former Conservative administration as a post-pandemic measure to encourage people to get back on public transport, is due to end in December.

But Peter Knight, Stagecoach South West’s managing director, says policy decisions by the Labour government is key to its future.

He said: ‘We are reimbursed by central government for the £2 fare, but there is a challenge as to what that looks like going forward.

‘We are only weeks into a new administration and that will be a policy decision for the government in the coming weeks and months.

‘At the moment, we are reimbursed for lost revenue at a fixed rate, but going forward that needs to keep pace with inflation.’

Mr Knight acknowledged the bus industry faces ‘significantly higher operating costs’ and that the ‘only way to cover these is from fares’.

He said the £2 fare had increased Stagecoach South West’s passenger numbers by around eight to 10 per cent, showing that people viewed it as ‘clearly great value for money’ and that its simplicity contributes to its effectiveness.

Separately, Mr Knight says the firm is addressing its net-zero ambitions through an order for 90 electric buses.

At present, all its 350-strong fleet is diesel, but the electric buses become operational in around 18 months.

Mr Knight acknowledged that while the buses are a positive development, the firm needs to install the infrastructure to make sure they can be charged and ready to hit the streets.

In terms of challenges, he said the biggest problem for his firm is navigating the county’s congestion and roadworks.

He said: ‘We work closely with Devon County Council to ensure roadworks are coordinated and bus services are given priority through them.

‘And where there is no alternative, we do the best job we can to ensure timetable resilience.’