Staffordshire County Council currently spends £18.3 million a year on transporting children with Special Educational Needs and Disabilities (SEND) and also commissions services for 970 routes for pupils entitled to free Home-to-School transport.
Now to ensure services continue the authority has set aside up to £1.89 million for a one-off payment for March and adjusted new contracts from April to reflect higher costs for operators.
Jonathan Price, Staffordshire County Council’s cabinet member for Education and SEND, said: "Fuel costs have been increasing for some time but the war in Ukraine, plus inflation, has seen a sharp rise in overheads for operators.
"Increasingly we are seeing contracts being handed back and that leaves the council searching for new providers to take over a contract at short notice in a market with limited capacity.
"If we can support existing providers, they can continue maintaining services that ensure pupils get to school and we keep costs down in the long run."
While the one-off payment for March was set at 5.4 per cent, contracts renewed from April have been set up so that the price will reduce if the cost of fuel falls in future.
In the last four months, operators have handed back 47 contracts as they face driver shortages, increasing costs of maintaining vehicles and steadily increasing fuel costs.
Fuel costs for operators have risen by almost a fifth in the last six months to around £1.76 per litre in April and this week the average price of diesel hit a new UK high at 180.29p.
Jonathan Price added: "Every day of term in Staffordshire we move 8,000 children entitled to free Home-to-School transport.
"It’s a huge operation involving hundreds of vehicles and drivers, as well as the support staff who accompany SEND children.
"The Council doesn’t run its own fleet of vehicles so relies entirely on the private sector.
"If we don’t act action now to recognise the changing situation, there is a real danger that we will be left unable to fulfil our legal obligation to transport entitled children to school."
While the bulk of the money will support SEND and mainstream Home-to-School services, some will be also be spent helping the small number of supported mainstream bus routes that the council backs to provide socially necessary services.