Select committee: Transport Committee
Conclusion 7
3rd Report – Buses connecting communities
Published 13 Aug 2025
Addressed to Department for Transport
Transport Committee Buses connecting communities All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The current Bus Service Operators Grant structure appears to disadvantage rural and low-demand areas, where lower fuel consumption per kilometre and longer average journey lengths can reduce the level of support received. This funding model does little to reflect the operational realities of low-density networks. As the sector transitions away from fossil fuels, a grant based on fuel use risks becoming increasingly misaligned with long- term policy goals. The previous National Bus Strategy recognised this and set out an ambition to reform the Bus Service Operators Grant to better support decarbonisation goals. (Conclusion, Paragraph 39)
From: Transport Committee, 3rd Report – Buses connecting communities (HC 494), 13 August 2025
Government response
The government responded to the whole report on 31 October 2025 (deadline 13 October 2025).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government welcomes the Committee's report and responds to each recommendation, agreeing with some in principle, committing to explore or consider others, and declining others, often citing the importance of local decision-making and a challenging fiscal environment.
- On funding, the Government "agrees with the Committee in principle" on the benefits of multi-year settlements, and "commit[s] to exploring the possibility of a five-year funding settlement for bus services with HMT as part of the next Spending Review".
- On ring-fencing funding for socially necessary services, it says it "would be challenging to identify an appropriate sum of money to ringfence" and believes service-level decisions should be taken locally.
- On a free bus pass for under-22s, it "recognises the benefits" but says there is "no funding available for such a scheme" in this Spending Review period, and will use learning from other schemes to inform future Spending Reviews.
- On a framework for demand-responsive transport, it does not consider that 18 months "would be a realistic timeframe", and says the first version of its best practice guidance is expected "later this year".