Bus Services Bill Contents


1.The Bus Services Bill proposes major reforms to the way in which bus services could be delivered in England outside of London. Introduced in the House of Lords on 19 May 2016, the Bill is due its third reading in the House of Lords on 23 November 2016. On 19 July 2016, we announced an inquiry into the Bill. In this Report, we make a number of recommendations to assist the House of Commons’ consideration of the Bill in Committee.

2.Buses are an essential part of the public transport system, accounting for 62% of all passenger journeys by public transport and generating significant social, economic and health benefits.1 Bus services are a vital lifeline, providing people with access to education, employment and public services and keeping them connected to their local communities; a recent report found that a 10% improvement in bus connectivity would result in a 3.6% reduction in social deprivation.2 Buses can help in tackling urban congestion, getting people to where they want to be more quickly, and reducing the environmental impact of travelling. And they are flexible enough to respond to the changing needs of the individuals they serve.3

3.However, the bus services market in England outside of London has been in decline since the 1950s.4 Since deregulation in 1985–1986, passenger demand for buses fell almost continuously until the mid-2000s, remaining broadly stable since then.5 This broad trend masks considerable local variation. Commercial bus mileage has decreased by 32% since 1999 in Manchester, while Liverpool City Region has seen a fall of 7% in 2015/16 compared to the previous financial year.6 Meanwhile, passenger numbers have increased in Oxford, Reading and Nottingham.7 Nevertheless bus patronage trends in London, where the bus market was not deregulated, stand in stark contrast to the rest of England.8 There are a number of reasons why the market in London is different from other parts of the country; these are explored later in this report.

Figure 1: Number of passenger bus journeys: Index 1985–86 = 100

Source: DfT, Statistical Table BUS0103, October 2016

Current framework for bus services in England

4.There are currently two different regulatory regimes for local bus services in England. In the capital, Transport for London (TfL) operates a system of bus franchising, whereby it determines the service specifications such as routes, fares and branding, and contracts with operators to run the services. Only those operators with a contract with TfL may operate services in London.

5.In the rest of England, operators may (subject to minimum safety and operating standards) run services as they choose, with Local Transport Authorities (LTAs) subsidising additional services they consider socially necessary and are able to finance. This can lead to a range of services, fares and branding in any given local area. LTAs can co-ordinate services through partnerships, including those provided for by the Transport Act 2000, as amended by the Local Transport Act 2008. Partnerships broadly take three forms, as set out below.

Voluntary partnerships and QPS are relatively common; by contrast, a QCS has never been implemented in practice.

Bus services funding

6.Funding for bus services comes from passenger fares and a number of different government sources. The Bus Services Operators Grant (BSOG) is paid to operators (and in some cases, LTAs) to allow them to recover some fuel costs, and has the effect of making marginal services commercially viable. The government also funds the English National Concessionary Travel Scheme (ENCTS). This is a reimbursement paid to operators and administered by local authorities for the travel of older and disabled people entitled to free off-peak travel. LTAs may also choose to fund additional concessionary schemes or bus routes.

7.Bus services are vulnerable to cuts resulting from funding pressures faced by LTAs. As noted by the Committee’s predecessor, the 20% reduction in BSOG from April 2012 and cuts in LTA spending has caused gaps in service provision.9 Locally subsidised fare schemes and routes, such as those run by some LTAs for young people or services relied on by rural communities, have borne the brunt of reduced spending.10 We received evidence that the increased proportion of statutory concessionary pass holders and anomalies in the ENCTS were creating difficulties for both LTAs and operators in some areas.11 Many LTAs have adjusted to reduced budgets by limiting expenditure on bus services, with one in five supported services being cut back since 2010.12 The impact has been particularly marked in rural and semi-urban areas where commercial services are less likely to be viable.13 For instance, we were told that the only regular bus services in the market towns of Appleby and Kirby Stephen in Cumbria (as well as intermediate villages) was being withdrawn two years after the local authority had withdrawn the subsidy.14

Bus passenger experiences and priorities

8.Passenger experiences of bus services are a mixed bag. It is true that many services have high passenger satisfaction levels.15 However, we also received evidence indicating the serious impact that reductions in bus services and the collapse of bus operators were having on those groups who rely on buses and, in some cases, whole communities.16 We were told of a lack of competition in some areas leading to unhealthy outcomes such as the withdrawal of more marginal Sunday and evening services.17 And we heard how increasing fares in some areas are making bus services less attractive to passengers without a concessionary pass.18

9.Transport Focus, the transport consumer watchdog, published research in May 2016 to understand bus passenger experiences and priorities. It found that 91% of bus users and 85% of non-bus users agreed that having a good bus network is important for the local area.19 It also identified the following top five priorities for improvement:

(1) Better value for money from bus journeys;

(2) More buses arriving on time at the bus stop;

(3) More journeys on buses running to time;

(4) Buses running more often than they do now; and

(5) More effort being made to tackle any anti-social behaviour.20

10.It is also worth noting 54% of bus users and 28% of non-bus users in the Transport Focus survey said they would consider making more journeys by bus. In addition, we received evidence suggesting ways in which buses may be made more accessible to some groups, including those with visual impairments or learning disabilities.21 This suggests that there is potential for the bus services market to grow if LTAs and operators are able to deliver improvements.

Overview of the Bus Services Bill

11.The Government has brought forward in the form of the Bus Services Bill legislative proposals to reform bus services in England. The proposals will not affect services operating wholly within Scotland, Wales, Northern Ireland or London. Announced in the 2016 Queen’s Speech, the purpose of the Bill is to:

12.The Bill was introduced in the House of Lords on 19 May 2016. The main provisions of the Bill as introduced into the House of Lords are as follows:

13.A number of amendments were made to the Bill in the House of Lords, including:

The House of Commons Library paper CBP 7545, Bus Services Bill [HL] will be published in due course and provides more detailed commentary on these aspects of the Bill.

This inquiry

14.In launching this inquiry, we were broadly concerned with whether the Bill would make buses more available and encourage more people to use them. The full terms of reference for this inquiry are available on our website.22

15.We received around 100 written submissions from LTAs, bus operators, passenger groups and individuals. In addition, we received almost 2,000 emails from members of the public, principally objecting to the prohibition on new municipal bus operators. We held one oral evidence session, where we heard from experts, passenger groups, operators and LTAs. We are grateful to all those who gave evidence.

This report

16.The next chapter of this report considers the provisions on franchising, partnerships and municipal bus operators which amend the regulatory structure for bus services. The third chapter addresses the accessibility of bus services, open data and ticketing. Finally, we consider the issue of congestion, which is not explicitly addressed in the Bill but which did emerge as a major concern in the evidence we received.

17.In this report, we make a number of recommendations to inform the House of Commons’ consideration of the Bill in Committee.

2 Greener Journeys, The Value of the Bus to Society, October 2016

3 Urban Transport Group (BSB0054)

6 Transport for Greater Manchester (BSB0104); Urban Transport Group (BSB0103)

7 The TAS Partnership (BSB0072)

8 More recently, bus passenger numbers in London have been declining, falling 3% between 2014/15 and 2015/16; see London TravelWatch, Watchdog calls for London bus performance improvements, 25 July 2016

9 Transport Committee, Fourth Report of Session 2014–15, Passenger transport in isolated communities, HC288

10 See for instance, The Intergenerational Foundation (BSB0015); Mr Malcolm Logan (BSB0086)

11 See for instance Dales & Bowland CIC (BSB0008); North East Combined Authority (BSB0009)

12 Campaign for Better Transport (BSB0040)

13 See for instance Age UK (BSB0085); Association of Colleges (BSB0068); Bus 4 Burton Campaign Group (B4B) (BSB0090); Campaign for Better Transport Bristol and Bath Travel to Work Area (BSB0050)

14 Dr John Disney (BSB0100)

15 Wellglade Limited (BSB0091); Q63 [Robert Montgomery]

16 Age UK (BSB0085); Association of Colleges (BSB0068); Bus 4 Burton Campaign Group (B4B) (BSB0090); Q55 [Dr Disney]

17 Dr John Disney (BSB0100)

18 Urban Transport Group (BSB0103); North East Combined Authority (BSB0009); TravelWatch NorthWest (BSB0055)

20 Transport Focus (BSB0018)

21 See for instance, Guide Dogs (BSB0082)

22 Transport Committee, Bus Services Bill Inquiry launched, 19 July 2016

22 November 2016