3rd Report – Buses connecting communities

In larger cities like London, getting from A to B can be as simple as turning up and boarding. In many smaller towns and rural areas, however, whole communities can be cut off with no service at all, or have services that run so infrequently that they do not meaningfully add to people’s transport options. Devolving greater control to local authorities could risk simply entrenching such inequality. Communities need to be able to count on having a minimum consistent level of service in order for conventional bus networks to thrive, and to provide a platform for the ‘virtuous cycle’ of improved service levels driving increased usage, which in turn supports network viability and justifies further investment. In many of the smallest and most isolated communities, however, a traditional bus may not be the best way of meeting needs. (Conclusion, Paragraph 21)

The Department should adopt an ambition for local transport authorities to provide by the end of this Parliament a minimum level of public transport connectivity, supported by long-term funding. As part of this, the Department should publish evidence-led guidance on expected service levels based on settlement type, to improve consistency across regions. Decisions should be made locally about where this baseline level of connectivity is best delivered by a conventional, timetabled bus service, and where it can be provided by alternative models such as demand-responsive transport. (Recommendation, Paragraph 22)

The short-term nature of funding for bus services has hampered local authorities’ ability to improve services. Five-year settlements in other transport sectors like rail and the strategic road network have enabled greater certainty and promoted strategic planning. Bus services, the most widely used form of public transport, require a similar commitment. (Conclusion, Paragraph 30)

We welcome the Department’s intention to move towards multi-year funding for buses but believe it would be beneficial to go further. The Department should move by the end of the current Spending Review period to a five-year funding settlement for bus services, for both capital and revenue spending. 46 This will provide a stronger foundation for improving and maintaining reliable local bus networks, particularly for areas that have suffered decline over a long period. (Recommendation, Paragraph 31)

The Department’s shift to needs-based allocation of Bus Service Improvement Plan funding is a welcome and necessary step away from competition. However, the current formula does not explicitly reflect the distinct challenges faced by rural and more isolated areas, such as lower population density, longer journey distances and higher per- passenger operating costs. Without a dedicated rural weighting, there is a risk that these specific needs will continue to be overlooked, and that historic disparities in funding and service provision will persist. (Conclusion, Paragraph 35)

The Department should consider introducing a rural weighting into its revised Bus Service Improvement Plan funding formula to reflect the higher per-passenger costs and structural challenges of serving low-density areas. This would help ensure that network improvement ambitions are not undermined by geographic disadvantage. (Recommendation, Paragraph 36)

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)

The Department should, as soon as practicable, reform the Bus Service Operators Grant (BSOG). The overarching goal of reform should be to incentivise growth in ridership, particularly across under-served areas, for example instead of mileage the grant could be based on passenger journeys. (Recommendation, Paragraph 40)

The Department has not made clear what specific improvements to local bus services it expects the duty to list socially necessary services to deliver. Designating a service as ‘socially necessary’ under an Enhanced Partnership will not automatically guarantee its long-term provision or trigger additional funding, nor will it necessarily improve the frequency and reliability of those services. Without a ring-fenced funding stream and a requirement for operators to commit to a minimum level of provision for socially necessary services, there is a risk that local authorities will not have any practical power to use the new duty to improve services. (Conclusion, Paragraph 48) 47

The Department should ensure that there is funding to support the provision of socially necessary services by ring-fencing a dedicated portion of its bus grant funding or by other means. This will help ensure that the duty to identify such services has practical effect and is not undermined by competing local priorities or budgetary pressures. In addition, operators working within Enhanced Partnerships should be required to commit to a minimum level of provision on routes designated as socially necessary. (Recommendation, Paragraph 49)

Growing fare box revenue from commercially viable routes is another possible source of support, in certain circumstances, for socially necessary services. The Department should require local transport authorities to consider using grant or fare box funding to enhance existing local bus services. In exercising the duty, the authority must have regard to growing passenger numbers and the overall sustainability of the network. (Recommendation, Paragraph 50)

The Department should mandate local transport authorities to publish a transparent methodology for how they determine which bus services qualify as socially necessary, to ensure public accountability. The Department should also develop common standards, and guidance, which the local formulas should take into account. This would enable residents to verify, for example, whether lists are based on objective assessments of need rather than being a response to the campaigning power of particular communities. (Recommendation, Paragraph 53)

The proposed statutory duty on local transport authorities to list socially necessary services applies only to those already in operation. There is no statutory requirement in the Bus Services (No.2) Bill for authorities to assess unmet needs or identify where new services might be required, although they may do so voluntarily. This creates a risk that gaps in provision are left unaddressed, particularly in rural and under-served areas. Without clear expectations or support for service expansion, the system risks locking in existing patterns of decline. (Conclusion, Paragraph 55)

The Department should make clear that local transport authorities operating within Enhanced Partnerships should not only maintain existing socially necessary services but should also be expected to identify and address areas of unmet need and potential for new services. The Department’s vision should be for local authorities to preside over a renaissance in bus services, rather than simply hold the line against continued deterioration. Authorities should be supported to actively grow the local bus network in response to demographic and economic changes, not just manage its decline. (Recommendation, Paragraph 56) 48

No national framework or clear design standard to improve the overall quality of bus stop infrastructure or real time information currently exists. Poor quality facilities like damaged shelters or seats and missing or inaccurate real time information undermine bus networks by deterring passengers. People without digital access, or whose bus stops are in black spots for mobile coverage, are disproportionately affected. While some local authorities have made commendable progress in improving real time information systems, such initiatives remain the exception rather than the rule. (Conclusion, Paragraph 63)

In order to increase ridership, the Department should establish minimum standards for bus stop facilities and the provision of real time information at bus stops where appropriate. While bus stops are used in different ways and a one-size-fits all approach may not be appropriate, improved bus stop standards should be a national aspiration. (Recommendation, Paragraph 64)

The Department should bring forward proposals as part of its upcoming Integrated National Transport Strategy for guidance on how local authorities and transport providers can achieve more effective integration between bus timetables and those of other transport modes. (Recommendation, Paragraph 65) Facilitating the transition to franchising

We welcome the Government’s ambition to enable local transport authorities to undertake franchising. However, many local authorities continue to face operational and capacity challenges which may be further strained by implementing such a complex reform. The Department must take a greater role in strengthening local authority capacity to ensure effective implementation. (Conclusion, Paragraph 73)

The Department should expand the Bus Centre of Excellence (BCoE) to include a dedicated support strand for rural and other local transport authorities which may struggle to implement franchising successfully within their current capacity. This strand should focus on building local capacity by providing access to legal and procurement advice and establishing embedded regional advisory teams. The BCoE should also help reduce administrative burdens by developing standardised templates for key documents such as data-sharing and non-disclosure agreements and offer training in the commercial and operational aspects of running bus services. (Recommendation, Paragraph 74) 49

Lack of access to consistent data about current services to support business cases creates an unnecessary barrier to franchising. The Department’s approach puts the cart before the horse: local authorities need access to the full range of relevant information before deciding whether to pursue franchising. (Conclusion, Paragraph 77)

The Department should set out a clear framework to ensure that local transport authorities have early access to operator data on patronage, fares and costs when undertaking a statutory assessment for bus franchising. The framework should include defined timescales for data provision, guidance to enable consistent data gathering and safeguards for commercially sensitive information, enabling informed decisions before commercial risks are taken. (Recommendation, Paragraph 78)

The Government’s franchising reforms offer a clear opportunity to embed stronger and fairer employment practices across the sector. Better pay, fair progression, and stable conditions are not only essential for retaining drivers but are also critical to maintaining reliable and high-quality bus services. Without addressing these workforce issues, the wider goals of reform risk being undermined. (Conclusion, Paragraph 81)

The Department should consider the practicalities of requiring local transport authorities which adopt bus franchising to incorporate improved employment standards for bus workers. This should include minimum pay rates—based on the London model—and fair pay progression based on a driver’s experience rather than their length of service with a specific operator. This would help to avoid the risk that operators bidding for franchises base their bids on unsustainably poor pay and conditions for staff. (Recommendation, Paragraph 82) Bus fares and concessions

Bus fares in England have risen faster than inflation and more steeply than other transport modes. While the fare cap has been broadly welcomed as a way of reining in unaffordable fares, it is a short-term measure, not a substitute for long-term policy. There is no clear national strategy guiding what fares are intended to achieve: promoting modal shift, improving affordability, increasing ridership, supporting network viability, or delivering wider social and economic goals. In contrast, Ireland has introduced a national fares strategy focused on consistency, equity, and simplicity. England could benefit from a similarly structured approach. (Conclusion, Paragraph 91) 50

The Department should develop, in partnership with local transport authorities and within 12 months, clear strategic priorities for what bus fares are aiming to achieve. It should articulate the strategic purpose of fare structures and guide consistent, transparent fare-setting at the local level. These priorities need to produce a coherent vision for how fare-box revenue and public funding will work together to produce the desired outcomes. (Recommendation, Paragraph 92)

Public transport remains a major barrier to employment for young people, especially in under-served areas where limited services and high fares make it harder to reach college, training , entry-level jobs, or shift-based work. In some areas, transport is restricting opportunity rather than enabling it. England’s patchwork of local youth concessions contrasts with national schemes in Scotland and Wales. A coherent national approach to ensure fair access across England is essential if the Government is serious about driving economic growth, which depends on removing barriers to education, training, and employment for the next generation. (Conclusion, Paragraph 98)

The Department’s review of the English National Concessionary Travel Scheme should consider piloting a free bus pass for under-22s, valid for travel at any time of day. This would support access to work and skills opportunities for younger people and help embed long-term public transport use. (Recommendation, Paragraph 99) A role for alternative service models

Alternative transport models such as DRT and community transport are essential for improving connectivity where conventional services are unviable. This makes them a possible model for sustaining socially necessary services. Their potential is being undermined, however, by fragmented regulation, inconsistent funding streams, and a lack of integration in mainstream transport policy and local planning. The Government should establish a coherent national framework that supports the integration of these models, ensures sustainable funding, and provides consistent guidance for delivery. (Conclusion, Paragraph 110)

The Department should within 18 months develop a dedicated policy and regulatory framework for alternative and complementary public transport models, including Demand-Responsive Transport (DRT) and community transport. This framework should include growing and expanding their role in serving poorly connected places and in connecting passengers to fixed- route public transport networks. The framework should include: 51 • clear guidance on DRT governance and a framework for integration with local transport plans; • guidance on providing socially necessary services through a DRT model; • a review of existing funding streams across departments (such as. home-to-school, health, and social care transport) to identify opportunities for coordination and shared use of DRT services; • optional access to nationally procured digital tools (such as routing software or booking platforms) to support local authorities in designing and managing DRT schemes; • guidance on how both community transport and demand-responsive transport providers should be included in Enhanced Partnerships, to support greater collaboration and ensure inclusive planning; and • the exploration of rural mobility models that prioritise improving access to services, rather than simply replicating traditional public transport, including the role of shared or private car use and lift- sharing schemes as part of a flexible, place-based approach. (Recommendation, Paragraph 111)

The Department should consider, with the Treasury, reform to the current VAT rules applicable to DRT services. This should aim to recognise the character of DRT as a public transport service, even when vehicles smaller than a Public Service Vehicle are used. (Recommendation, Paragraph 112) A strategy for buses

We welcome the Government’s reforms aimed at devolving greater control to local authorities. This will not on its own, however, be a sufficient vehicle for delivering all the positive outcomes the Minister described as wanting for bus services. There is no consensus that structural reform alone can achieve aims such as increased connectivity, better integration, and more affordable journeys. Given the diversity of regional and local priorities, a national statement of strategic goals is needed to provide clear direction and coherence, setting out not only the Government’s ambitions for the bus network, but also the pathway for achieving them. Without this, the risk remains that delivery will be uneven and the wider policy aims of reform left unmet. (Conclusion, Paragraph 116)

The Government should within 18 months publish a new national policy for buses that sets out a clear vision for what a successful bus network looks like and what it should achieve. It should outline how buses interact 52 with policy objectives such as supporting economic growth, encouraging modal shift, improving affordability, reducing environmental impact and tackling regional disparity in network provision. It should provide a basis for renewal of bus services in England and transformative growth in ridership. (Recommendation, Paragraph 117)

This vision should also be complemented by a new regional performance metric that enables meaningful comparison of services across different parts of the country. The metric should cover key indicators such as service frequency, reliability and passenger satisfaction, and it should be used to benchmark progress for improved connectivity across different local transport authorities. (Recommendation, Paragraph 118) 53