This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
This is the report summary, read the full report.
For too many years the story of buses in England outside London has been one of managed decline. The publication of the Government’s National Bus Strategy in March 2021 represented an opportunity to change that. It was ambitious, full of good ideas and supported by extra much-needed funding. So far, though, despite lots of positive rhetoric and some welcome action, the promised transformation has not been achieved. We believe it is still possible, but that will require the Government to maintain its focus on buses. The Government should set out clearly how it plans to evaluate the success of the Strategy and set out a timescale for the publication of future iterations.
At the heart of the Strategy are Bus Service Improvement Plans (BSIPS), which set out how each local transport authority (LTA), alongside its local bus operators, hoped to put the Strategy into practice. This process brought out the best in those involved and we were impressed by their innovation and commitment. The Government made just over £1 billion available to partially fund some of these schemes and we are confident that this will do much good.
Yet this is simply not enough money to produce real improvements in bus services across the whole country. Local areas were asked to be ambitious, but the Department has not matched this level of ambition in the funding it has made available, pitting local areas against each other for a share of an inadequate pot. Allowing roughly half the country to miss out risks entrenching, and in some cases creating, a two-tier system in which bus services improve in one area while, across an invisible county border, they worsen or even disappear.
We also continue to be concerned about the capacity of smaller LTAs to compete on an even playing field with larger authorities in competitive bidding processes: the Government must find a way to ensure all areas are given a fair chance. The Government must also take steps to improve its own bidding process which has appeared slightly chaotic at times, with periods of delay, confusion about the terms of trade and concerns about Departmental capacity.
The Government should commission and publish an independent analysis of the first tranche of BSIP funding. There should be a firm commitment to make available significant further funding to support the implementation of the Strategy.
BSIPs must be implemented via either an Enhanced Partnership (EP) or franchising. Most LTAs have chosen to form EPs, which are formal, statutory partnerships between LTAs and bus operators. We believe that bringing more coherence and collaboration to local bus services is a good idea, but that EPs are a largely untested way to do this. The Government must carefully monitor how well they are working and ensure appropriate contingencies are in place.
The Government also made other commitments in the Strategy that we welcomed, as did many in the bus sector. It said it would provide new guidance on socially and economically necessary services and consider introducing a statutory requirement on local authorities to provide them, look again at the ban on new municipal bus companies and issue updated guidance to support areas considering franchising. Nearly two years on, none of these things have happened. We urge the Government to put its promises into action.
We welcome the Government’s plans to phase out non-zero-emission buses. It will be expensive and, in the short-term at least, difficult on longer and more rural routes, but it is necessary. However, we note that decarbonising buses will only take the Government so far towards its objective: increasing bus usage and achieving modal shift from the private car are also necessary. This ultimately depends on provision of reliable, frequent services.
We support the Government’s ambition to have 4,000 new zero-emission buses on the road in the UK by the end of this Parliament and welcome the funding allocated to meet this aim. However, it seems increasingly unlikely it will meet its target, given how few of these vehicles are now on the road. Obtaining funding and placing orders are slow and piecemeal processes, and it is too difficult for UK manufacturers to invest with confidence in new types of vehicle and manufacturing hubs. The up-front cost of zero-emission buses will remain higher, especially when the cost of upgrading and replacing infrastructure is included. That will be enough to put off many potential buyers. If the Government is to meet its target it will need to intervene in the process more actively.
The Government should set out a clear, staged plan for the full transition to zero-emission buses, in tandem with the delayed response to its consultation on ending the sale of non-zero-emission buses. This should include a clear long-term funding plan focussed in particular on difficult-to-decarbonise rural routes and supporting the installation of costly new infrastructure. It should keep an open mind about whether this transition could also involve synthetic fuels alongside battery electric and hydrogen vehicles.
Another crucial part of decarbonising the bus sector is reforming the Bus Services Operators Grant, a subsidy, based on fuel consumption, paid by the Department for Transport to bus operators, community transport operators and local authorities. Successive Governments have promised to act, but little progress has been made. Further delay risks slowing the transition to zero-emission buses. The Government must consult on Bus Services Operators Grant reform now and introduce a new funding formula which incentivises operators to transition to zero-emission buses.
Post-pandemic, many people’s lives have changed, and this has altered, perhaps permanently, when and where they wish to travel. Reduced patronage has left many bus services hanging by a thread, dependent on further extensions of the Government’s ostensibly short-term recovery funding. Yet in some areas and for some types of passenger demand has surged. The sector has also faced issues such as rocketing fuel prices and pressures on staff recruitment, availability and wages.
So far, the Government has responded to this challenge with limited, albeit welcome, schemes such as the £2 fare cap. But it needs to do more. It would be absurd for the Government to spend billions of pounds to support the ailing bus sector through the pandemic and then allow it to wither away. The Government must continue to support the sector as it builds a new network fit for the post-pandemic world. This should be informed by a detailed analysis of the impact of schemes like the £2 fare cap and BSIPs.