ELY Centre public transport funding to return to pre-pandemic levels

The Finnish Transport and Communications Agency Traficom allocates the state budget funding for regional and local transport procurement and development to the Centres for Economic Development, Transport and the Environment (ELY Centres) that act as the competent authorities for public transport. For a long time now, the ELY Centre public transport appropriation in the state budget has been around 30 million euros each year. Two thirds of the appropriation on average have gone to procuring contract-based transport services. Furthermore, ELY Centres grant municipalities in their region with public transport government grants, whose share of the appropriation has been around one third, i.e. 10 million euros each year. 

Decreased market-driven bus transport complemented with purchased services

Changes in travel behaviour brought on by the COVID-19 pandemic and increased costs due to the Russian invasion of Ukraine have meant that the level of market-driven bus transport has decreased. Connections have been secured with services purchased by ELY Centres, funded with the additional appropriations issued in supplementary budgets in 2020–2022. In 2020–2024, ELY Centres received around 40 million euros on average each year.

According to the Government Programme, additional appropriations will no longer be allocated. Therefore, from 2025 onwards, the state budget can be expected to return to the 2019 funding levels of around 30 million euros. This will require the annual ELY Centre public transport costs to be cut on average with 10 million euros, i.e. 25%.

Furthermore, the costs of the bus transport sector have increased significantly in recent years. The bus transport cost index has risen by around 20% from 2020 to 2023. This means that the costs of contract-based transport have also risen and the purchasing power of available funding has diminished.

Traficom allocates the available appropriations to ELY Centres

Traficom requests ELY Centres to provide information on their need for appropriations prior to the annual allocation of appropriations to each ELY Centre. Until now, Traficom has been able to take the funding needs reported by ELY Centres into account reasonably well. However, the situation is now changing. 

“The basic public transport appropriation for ELY Centres has remained at the same level for a long time now, but the amount of purchased services has increased. Furthermore, the increased costs of the sector have reduced the purchasing power of the appropriations. The need for appropriations at ELY Centres is now considerably greater than the appropriations available,” says Senior Specialist Salla-Mari Rintala.

Traficom primarily steers the use of appropriations at ELY Centres from a legislative perspective, and ELY Centres make the final decisions on purchased services and government grants issued to municipalities. Traficom produces data to support decision-making and coordinates public transport cooperation on a national level. In addition, discussions on the situation and measures of public transport are conducted regularly with each ELY Centre.