This post is by Jonathan Bray, director at the Urban Transport Group.
This year is shaping up to be a challenging one for public transport, as if 2021 wasn’t tough enough. And, as buses are public transport for millions of people in the UK, this travel mode – and those who use it – could be hit the hardest.
Public transport is facing a perfect storm. ‘Work from home where you can’ advice has hit public transport’s core commuting market hard. The pre-Christmas shopping and socialising binge, which kept the patronage afloat, also looks like it was followed by a hard January comedown. Patronage has been clawing its way back upwards but it may still be six months before we know what the new baseline for public transport use is.
Before Omicron, driver shortage was a serious problem for bus services. Unlike road haulage, where the Department for Transport (DfT) has been proactive in addressing the problem, there has been no equivalent strategy for buses. This situation is now exacerbated by the self-isolation imposed by the Omicron surge. Industrial action is also on the rise.
Funding decisions are being taken to the wire
The current phase of additional government Covid funding support for urban public transport outside London runs out by the end of March. It is not clear whether this funding (which is based on patronage projections the government will not share with us, and which may prove to be optimistic) will be sufficient to keep services running.
The Treasury’s standard practice is to take any decisions on additional funding right to the wire. However, local transport authorities must set their budgets well before the end of March and plan any service changes that may be required.
All of this points to operators moving to rebase their commercial networks at a significantly lower level than they were before the pandemic. Some are now starting to break cover on this. The onus then passes to local transport authorities to step in and pay private operators to keep services running. But authorities have limited resources to do so and the prices that private bus companies are quoting to keep those services running have soared: increases of 50 per cent are not uncommon. This reflects both rising costs and operators taking advantage of low levels of competition allowing tenders to name their price.
The need to support light rail could take money from buses
The funding challenge for transport authorities with large light rail systems is also particularly acute given that most of the costs of light rail are fixed, so significant cost reductions are difficult to achieve, short of closing them down. The authorities also have legal and fiscal responsibilities for light rail systems which they do not have for bus services. So, if light rail funding support is not extended beyond March 2022, transport authorities may be forced to make savings from spending on buses to keep the light rail systems operational.
It wasn’t meant to be this way. The government’s national bus strategy, Bus back better, launched in March 2021, envisaged a new dawn for buses with more, cheaper and greener bus services everywhere. It was predicated on £3 billion of additional “transformational” funding and on the tacit assumption that the pandemic would soon be over.
However, the pandemic is still here and, in the November 2021 spending review, the Treasury failed to countersign Number 10’s £3 billion cheque. We still don’t know how the money for buses the Treasury did agree (currently around £1.5 billion) will be divided up. If more of it is not purloined for additional Covid revenue support, the additional investment will be a shot in the arm for bus services in those areas that receive it.
But the danger is that this may be too little too late, as the first half of 2022 looks like it may see another lurch downwards in the scale and extent of bus networks, following years of pre-Covid decline and then the hammer blow of the pandemic itself.
There is still time to avert the loss of bus services
There is still just enough time to avert this. It could be done by devolving adequate funding to transport authorities to support networks in a planned, integrated and cost efficient way. This would be preferable to allowing DfT to continue taking the path of least resistance, routing hundreds of millions of pounds of Covid support so private bus operators can manage service decline in a way that serves their own commercial and corporate interests.
It would also require a national strategy to tackle driver shortages, as well as pressing the fast forward button on allocating the funding promised in the spending review to improve bus services. Transport authorities could then crack on without further clawback of funds and second guessing from Whitehall.
Such a ‘booster programme’ could help to reverse the fortunes of the bus as a vital public transport service. Time is, however, running out. This may be the year that Covid becomes endemic, but let’s not also make it the one in which many of our valued bus services become extinct.