Rising diesel prices are placing tens of thousands of school coach services at risk of collapse, according to industry representatives, with nearly half of operators threatening to withdraw from contracts if fuel costs do not decrease. The Confederation of Passenger Transport (CPT) warned that this could jeopardize transport for around 600,000 children who rely on coaches each weekday to reach school, particularly in rural areas.

The CPT’s concerns stem from a sharp rise in diesel prices—up more than 40 percent since the onset of the conflict involving Iran—that has left many coach firms unable to cover costs. Contracts for school transport are typically negotiated on an annual fixed-price basis, meaning companies cannot adjust fees in response to fluctuating fuel expenses. Graham Vidler, the CPT’s chief executive, highlighted that this inflexibility is forcing operators into financial losses or contract terminations.

“Our members are on a knife edge. A quarter have already reduced operations, two thirds say they’re concerned about their viability and some operators have gone out of business,” Vidler said. A recent survey of more than 500 CPT members, representing approximately 10,000 coaches, found that 45 percent plan to exit school transport services next year if current conditions persist. This shift would place intense pressure on local authorities and schools, potentially disrupting access to education for students who depend on free transport mandated by the Education Act.

Under the act, local authorities are responsible for providing free travel to pupils living beyond specific distances from school—more than two miles for those under eight years old and more than three miles for older children. Should coach operators withdraw, authorities might have to arrange alternative transport using taxis or minibuses, typically at greater expense.

The CPT urged Chancellor John Healey to introduce a fuel duty rebate of 20p per litre for school coach diesel in the upcoming Budget, a measure that Vidler said could reduce costs by about 13 percent. Although coach companies are able to reclaim VAT on diesel, the net price remains high, currently around 160p per litre.

The government has offered some relief through a £30 million one-off payment to support bus operators facing increased fuel costs; however, according to Vidler, the majority of those funds have been allocated to urban bus services, leaving school coach firms struggling to manage surging expenses.

With narrow profit margins and fixed contracts, the CPT warns that without targeted assistance, many coach operators will view school runs as financially unsustainable burdens rather than stable revenue sources, raising urgent questions about the future of school transport provision nationwide.