HomeLow carbon futureA funding cliff edge is threatening local bus services across the country

A funding cliff edge is threatening local bus services across the country

This post is by Silviya Barrett, head of policy and research at the Campaign for Better Transport.

Buses are essential. They account for more than two thirds of all public transport journeys and are an environmentally friendly option for local trips. People with no access to private vehicles, including many younger, older or disabled people, and those on low incomes, rely on good and affordable bus services.

But bus use and provision have declined over time and the pandemic has made matters worse. This presents a threat to local buses due to the way the market is structured and services are funded.

In England, most bus services are provided by private operators. Routes that are not commercially viable, but which are deemed socially or economically necessary, are funded by local authorities.

There is uncertainty about future recovery support
Throughout the pandemic, the government has provided funding packages to compensate for the loss of fare revenue and maintain services, initially through the Covid-19 Bus Service Support Grant and then through recovery grants. However, this support all expires at the end of March and there has been no announcement about whether, and by how much, it will be replaced.

While, originally, the government might have hoped the sector could fend for itself after March, it is now clear that passenger numbers will not have recovered. Bus use had reached 80-85 per cent of pre-pandemic levels by last autumn, but the latest Omicron surge has knocked it back down again. An extension of the recovery funding is needed to keep services going.

In addition, operators receive direct reimbursements from local authorities for free travel under older or disabled person bus passes. At the start of the pandemic, the Department for Transport instructed authorities to continue making this payment at the pre-pandemic use levels. Again, this arrangement is due to terminate at the end of March. If the requirement is extended and not compensated for from central government, local authority budgets will be left with a huge hole which is likely to force further cuts to socially important bus services. But, if the reimbursements revert on the basis of actual usage, the income of private bus operators would fall further, threatening commercial services.

As disabled and older people are among the most vulnerable, their bus use could take longer to recover to previous levels. In this case, the fare difference from concession pass holders should be rolled into the recovery funding which compensates for reduced patronage from other fare payers, which has directly resulted from government’s public health messaging during the pandemic.

Services are already being lost
Unless they are extended, the drying up of these funding sources will mean bus service cuts and frequency reductions for both commercial and local authority supported services. Operators need to know now what is happening so they can plan service provision. They have an obligation to notify the local authority and the traffic commissioner ten weeks before changing a route or timetable. This means they have to make decisions about service provision this month to mitigate funding shortages from April. In the absence of a clear funding decision from government, this has left the sector fearing a cliff edge of bus cuts early in the new year, with an estimated 20-25 per cent of commercial services under threat.

While there are some indications that the traffic commissioner’s timescales could be relaxed and that the government might extend financial support to the sector, it is uncertain how much funding might be provided and for how long. Combined with other factors, like driver shortages, this has led to service cuts already in places like Oxfordshire, Tyne and Wear, South Yorkshire and Derbyshire.

Widespread cuts would cause an irreversible drop in journeys by bus, contributing to economic decline, the inability of vulnerable people to access basic services, social isolation and increased private vehicle pollution and emissions.

Current passenger numbers shouldn’t be used as the benchmark
The Treasury may baulk at providing similar amounts to those it has already spent supporting public transport during the pandemic and there is a risk it will ask operators to adjust service levels to a perceived lower ‘new normal’. But current passenger numbers should not be accepted as the status quo, until operators have been given a fair shot at recovery, with no further social restrictions, clear government messaging that public transport is safe and sustained efforts to promote public transport use.

The government has the right vision for the long term future of bus services. In March 2020, its National Bus Strategy said it would deliver affordable, quality bus services for all. It asked local authorities to submit ambitious costed plans for how to transform local services alongside private operators, promising £3 billion for buses. However, by the autumn, the Budget only made £1.2 billion available for the planned transformation, with much of the remainder committed to zero emission buses (rather than local improvements for passengers) and infrastructure investment in large metropolitan areas. Given that the total amount requested in local authority plans is at least £7 billion, many will either miss out completely or have to dramatically scale down their plans, potentially leading to further cuts in provision.

It’s clear more money is needed, with pandemic-related recovery funding kept separate from funding for the delivery of the national bus strategy, if its objectives are to be achieved. In addition, funding allocations should be rebalanced with some capital funding reallocated for revenue support to keep services running. While capital investment can be much more readily secured from private sources, the government should focus on protecting services and boosting passenger numbers so that  both commercial operators and local authorities are able to run viable services across the country. The alternative would be the large scale loss of bus services, which would be disastrous both for local communities and the effort to create a greener transport system for us all.

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Green Alliance is a charity and independent think tank focused on ambitious leadership and increased political support for environmental solutions in the UK. This blog provides space for commentary and analysis around environmental politics and policy issues as they affect the UK. The views of external contributors do not necessarily represent those of Green Alliance.

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