3rd Report – Buses connecting communities

The government agrees in principle on the benefits of multi-year, long-term funding and confirms existing multi-year bus funding. It commits to simplifying funding streams from 2026/27 and will explore the possibility of a five-year funding settlement for bus services with HM Treasury as part of the next Spending Review. However, it does not commit to adopting an ambition for local transport authorities to provide a minimum level of public transport connectivity or to publishing evidence-led guidance on expected service levels.

The government agrees in principle on multi-year funding and confirms existing multi-year allocations. However, it commits only to exploring a five-year settlement with HMT as part of the next Spending Review.

The government did not address the recommendation to establish minimum standards for bus stop facilities and real-time information. Instead, it discussed the complexity of regulations for Demand Responsive Transport (DRT) and Community Transport (CT) and their integration into the wider bus network.

The government defers the development of clear strategic priorities for bus fares, stating it will consider options for the eventual end of the National Bus Fare Cap and bring stakeholders together to explore future models for fare support and structure. It highlights existing local authority flexibility and the commercial setting of most fares.

The government recognises the issue but states VAT policy rests with HMT and any changes would need wider tax policy consideration. DfT has conveyed the sector's concerns to HMT and will continue to highlight them, but does not commit to actively considering reform itself.

The government acknowledges the potential benefits of standardized service levels but notes that implementing a national minimum level is challenging due to regional differences. It reiterates its commitment to devolving greater control and consolidating funding for local authorities, and states it will work with local authority groups to consider long-term options for raising service levels, alongside improved guidance.

The government stated it is reviewing the Local Authority Bus Grant formula for 2026/27 allocations and will consider the recommendation, but it did not commit to providing five-year funding settlements for bus services to ensure long-term certainty.

The government confirms the current funding formula is interim and commits to reviewing it for 2026/27 allocations. It states that it will actively consider the recommendation for a dedicated rural weighting in finalising the new formula.

The government did not address the recommendation to introduce a rural weighting into its funding formula, instead stating it provides significant funding to LTAs and expects it to be used to support services.

The government did not respond to the conclusion about reforming the Bus Service Operators Grant due to its structure and misalignment with decarbonisation goals, instead discussing guidance for local authorities on socially necessary local services.

The government did not address concerns regarding the practical effectiveness of the duty to list socially necessary services due to a lack of ring-fenced funding or operator commitment. Instead, it outlined its commitment to supporting safe and accessible bus stops.

The government did not address the recommendation for ring-fenced funding for socially necessary services or operator commitments to minimum provision. Instead, it discussed the Integrated National Transport Strategy and efforts to improve timetable coordination across transport modes.

The government did not commit to requiring local transport authorities to consider using grant or fare box funding to enhance bus services and grow the network. Instead, it focused on supporting LTAs with franchising models through pilots and developing a guide on delivery models.

The government did not address the recommendation for LTAs to actively grow the bus network and address unmet need. Instead, it focused on extending the £3 National Bus Fare Cap until March 2027 and considering future options for fare support and reform.

The government did not address the conclusion about the absence of national standards for bus stop infrastructure and real-time information. Instead, it discussed the unaffordability of free travel for under-22s and local approaches to youth concessions.

The government acknowledges the importance of the issue for the DRT sector but deflects responsibility for VAT policy to HMT, stating DfT will continue to highlight sector concerns rather than addressing the recommendation for guidance on bus timetable integration.

The government discusses implementing Outcomes Frameworks for mayoral authorities and a Bus Indicator Pilot to extend outcomes-based approaches for accountability, but does not address the recommendation to expand the Bus Centre of Excellence for capacity building support.

The government notes that LTAs can use existing funding for fare initiatives and has extended the national bus fare cap until March 2027. It commits to considering options for the cap's eventual end and will bring stakeholders together to explore future models for fare support and coherent fare structures.