Darren O'Rourke (Meath East, Sinn Fein)
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I thank the Ceann Comhairle for selecting this matter, which has to do with the significant challenge facing school bus operators and the wider coach industry. The considerable increase in the cost of petrol and diesel has had an impact on every aspect of the transport sector but is having a particularly severe impact on the coach industry. From what we hear, the school transport system is on the verge of collapse because of a lack of Government support. The Coach Tourism and Transport Council of Ireland, CTTC, which represents many school bus operators, gave a stark warning to the Joint Committee on Transport and Communications last week when it stated that 95% of school transport providers were unable to guarantee service provision to the end of the school year in June.

I appreciate the Government has cut excise on petrol and diesel but that is not enough. More needs to be done given the record fuel prices. The Government stepped in immediately for the haulage sector and provided €100 per vehicle per week for two months. In contrast, the same has not been done for the school bus sector. School transport is an essential service. Almost 120,000 children use the scheme daily, with 90% of journeys carried out by private bus companies. From a climate perspective, school transport is something we should be encouraging and expanding radically. Without it, parents would have to take time off work or give up work altogether to drive their children to and from school. The knock-on impact on the wider economy of a collapse in these services would be significant. These operators cannot be left without support any longer.

School bus operators do not have fuel variation clauses in their contracts. This has made their businesses unsustainable. Many are operating under the terms and conditions of contracts signed as much as five years ago when fuel was far cheaper than it is today. Due to the lack of a surcharge or fuel variation clause, they have had to absorb the hike in fuel costs, which has wiped out any profit for the service they provide and has left very many of them making losses. Representatives of the CTTC stated that the current situation was unrealistic, unsustainable and unaffordable. Operators need support.

This is a vital service that serves communities throughout the country. All Deputies and councillors know the importance of the school transport system because they know people who are excluded from it every year and the major inconvenience caused by that for families in terms of organising their working week. What does the Department intend to do to support the school transport sector and get it to the end of this school year and beyond?

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Deputy for raising this issue. It is timely to do so. Before I address it, I wish to give Members an outline of the extent to the school transport service.

School transport is a significant operation managed by Bus Éireann on behalf of the Department of Education. In the current year, as Deputy O'Rourke is aware, more than 121,400 children, including more than 15,500 with special educational needs, are transported daily to primary and post-primary schools throughout the country. This was at a cost of €289 million in 2021. The purpose of the Department's school transport scheme, having regard to available resources, is to support the transport to and from school of children who reside remotely from their nearest schools.

Regarding increasing fuel costs, as the Deputy will be aware, the Government's announcement of a reduction in excise on fuel will result in a decrease in the cost of fuel. The reduction of 20 cent per litre on petrol and 15 cent per litre on diesel will be in place until 31 August at an estimated cost of €320 million. This is a national measure aimed at easing the financial burden on contractors and families at this time.

In saying this, the Department of Education is aware that a number of contractors have highlighted concerns about the ability to sustain school transport services to the end of the school year given the recent increases in the cost of fuel. As the Deputy made clear, the contracts that are in place do not have fuel variation clauses and, as such, no such mechanism can be invoked.

In this context, the Department is considering, in consultation with relevant Departments and Bus Éireann, the implications that increasing fuel costs may have on the provision of school transport services. It is engaging with the Department of Public Expenditure and Reform on the matter. The Department of Education is also aware of the potential impact of the current situation unfolding in Ukraine, which is impacting on fuel prices further.

The Department's negotiations with the Department of Public Expenditure and Reform have commenced, but I am not in a position to say what their outcome will be.

Darren O'Rourke (Meath East, Sinn Fein)
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I thank the Minister of State. I am sure that, like me and other Deputies, he has been contacted by school bus operators. I have been contacted by operators from across the country in my capacity as transport spokesperson. One in my constituency has 24 school contracts. It signed those when diesel was at 90 cent per litre. It buys 14,300 litres of diesel per week, which lasts only ten days. It has 27 staff but does not know what the future holds for them.

I accept the Minister of State's response, in which he outlined the current state of affairs. If school bus operators were in front of him today, they would be asking him when a decision was going to be made. I said that many were running at a loss, but all of those that signed contracts when diesel was well below its current price are actually running at a loss. I accept that considerations are being made, but I implore the Minister of State. From my perspective and that of school transport operators, time is of the essence. If there is an unnecessary delay, there is a risk that some of these businesses, which could be kept on the road, will not be. That is not something any of us wants to see.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I appreciate the Deputy's points. There are 6,159 vehicles operating services under the school transport scheme, of which 5,880 are operated by private contractors under contract with Bus Éireann. A high proportion of operators are private contractors. Bus Éireann is receiving a significant volume of calls from contractors inquiring about the financial situation. One or two contractors have formally indicated that they may have difficulty maintaining their contracts through the school year. We hope that situation will not materialise in many cases.

According to a survey conducted by the CTTC, two thirds of its members have seen an increase in fuel costs of more than 50% over the past 12 months and would require an increase of approximately 30% to 35% in contract rates to compensate them and allow them to continue operating services.

I have outlined the scale of the difficulties involved. The Department of Education and the Department of Public Expenditure and Reform are in discussions on the severity of the situation. I am conscious of the contrast the Deputy made with the road haulage sector. I do not want anyone to take it that I am saying it will be addressed, but we are conscious of that fact in our discussions.

School transport is being provided for pupils who have arrived from Ukraine and been enrolled in schools. The Department is making arrangements to deal with such cases, depending on where their accommodation is located. Further details on the additional requirements in terms of school transport for Ukrainian children and others who have come to Ireland will be issued shortly.