Fourth Report - Implementation of the National Bus Strategy

The Bus Service Improvement Plan process has brought out the best in many local transport authorities and bus operators. We have been impressed by the ideas and innovation produced and the enthusiasm and commitment shown. We note the prevalence of bus priority plans as part of urban bids and demand-responsive transport schemes as part of rural ones, a sign of the very different challenges bus services face in different parts of the country.

We welcome the funding for Bus Service Improvement Plans made available as part of the Government’s National Bus Strategy. It will do much good. Yet just over £1 billion is simply not enough money to produce real improvements in bus services across the country. Local areas were asked to be ambitious, but the Department has not matched this level of ambition in the funding it has made available. Instead local areas were pitted against each other for an often miserly share of an inadequate pot.

The publication of the National Bus Strategy was greeted with enthusiasm across the country, but this has dissipated in the many areas which received no funding to put their ambitious plans into action. Allowing roughly half the country to miss out risks entrenching, and in some cases creating, a two-tier system in which bus services improve in one area while, across an invisible county border, they worsen or even disappear. Without further rounds of funding this ‘national’ Strategy will barely scratch the surface.

We continue to be concerned about the capacity of smaller local transport authorities to compete on an even playing field with larger authorities in competitive bidding processes. We welcome the Government’s attempts to support less successful authorities, but this funding does not seem to have fixed the problem. If the Government is going to allocate funding via competitive bidding it must find a way to ensure all areas are given a fair chance.

The bidding process for BSIP funding has appeared slightly chaotic at times, with periods of delay, confusion about the terms of trade and concerns about Departmental capacity. While we understand the short-term impulse to prioritise communication with winning bidders, it makes little sense in the long term if the aim is to improve bus services across the country. It is crucial that the Department gives every assistance to those who have been unsuccessful so next time they can be winners.

The Government should commission and publish an independent analysis of the first tranche of Bus Service Improvement Plan funding. It should then consult on the structure and aims of a further disbursement of ‘transformation’ funding. Underpinning this should be a firm commitment to make available significant further funding to support the implementation of the National Bus Strategy. (Paragraph 59) Implementation of the National Bus Strategy 41 Models of delivery

Bringing more coherence and collaboration between local transport authorities and bus operators to local bus services is undoubtedly a good idea. But Enhanced Partnerships are a largely untested way to do this. The Government has made a big bet on them being the right model. It must carefully monitor how well they are working and ensure appropriate contingencies are in place.

The Government made various commitments in the National Bus Strategy that we welcomed, as did many in the bus sector. It said it would provide new guidance on socially and economically necessary services and on bus franchising. It also suggested it would consider introducing a statutory requirement on local authorities to provide services deemed socially or economically necessary and look again at the ban on new municipal bus companies. Two years on, none of these things have happened and the long-term security of many bus routes that are vital for communities remains uncertain. The Minister told us to expect announcements in late 2022, but we were disappointed. While we accept the last two years has been a busy time for the Department, we urge the Government to put its promises into action. (Paragraph 77) Zero-emission buses

We welcome the Government’s plans to phase out non-zero-emission buses. It will be expensive and, in the short-term at least, difficult on longer and more rural routes, but it is necessary. However, we note that decarbonising buses will only take the Government so far towards its objective. Wider transport decarbonisation will require it to achieve the aims of the Strategy by increasing bus usage and therefore achieve modal shift from the private car. This ultimately depends on provision of reliable, frequent services. A debate should be had about whether this would be supported by a Department for Transport target to reduce car usage in England by the end of the decade, such as those seen in Scotland and Wales.

We support the Government’s ambition to have 4,000 new zero-emission buses on the road in the UK by the end of this Parliament and welcome the funding it has allocated to meet this aim. However, it seems increasingly unlikely it will meet its target, given how few of these vehicles are now on the road. Currently the funding process is slow and piecemeal. It is too easy for local authorities to put off placing orders despite being given the money to do so and too difficult for UK manufacturers to invest with confidence in new types of vehicle and new manufacturing hubs. In some cases, orders using tens of millions of pounds of public money are being made to overseas manufacturers, with a commensurate impact on domestic vehicle production and threat to the UK bus industry. UK bus manufacturers have called on UK ZEB funding schemes to incentivise UK ZEB orders over overseas orders thereby supporting UK manufacturing. We support those calls and call on the Government to work with the sector to facilitate such incentives.

If the Government is to meet its target it will need to intervene in the process more actively. We note that Scotland’s scheme in which operators bid for funding centrally, thereby cutting out the middleman, has allowed Scotland to power ahead with its 42 Implementation of the National Bus Strategy bus decarbonisation plans. According to the Secretary of State’s own December 2022 figures, Scotland has ordered 10.11 ZEBs per 100,000 people compared to 0.94 ZEBs per 100,000 people in England outside London.

We are not convinced by the Government’s argument that incentivising the purchase of a zero-emission buses will no longer be necessary once their lifetime cost decreases to that of comparable diesel buses. The up-front cost of ZEBs will remain higher, especially when the cost of upgrading and replacing infrastructure is included. That will be enough to put off many potential buyers. If zero-emission buses are the right choice to meet this country’s Net Zero goals, as the Government has said, then it should not leave the job half-done.

The Government should set out a clear, staged plan for the full transition to zero- emission buses, in tandem with the delayed response to its consultation on ending the sale of non-zero-emission buses. This should include a clear long-term funding plan focussed in particular on difficult to decarbonise rural routes and supporting the installation of costly new infrastructure. It should keep an open mind about whether this transition could also involve synthetic fuels alongside battery electric and hydrogen vehicles.

Reforming the Bus Services Operators Grant will be complicated and may prove controversial, but it is necessary. Successive Governments have accepted that, and promised to act, but little progress has been made. Further delay risks slowing the transition to zero-emission buses. A new formula could and should accelerate it. Enough time has passed for all options to be considered; what is needed is action.

The Government must consult on Bus Services Operators Grant reform now and proceed as quickly as is feasible to introduce a new funding formula which incentivises operators to transition to zero-emission buses. (Paragraph 110) Conclusion

For too many years the story of buses in England outside London has been one of managed decline. The publication of the National Bus Strategy represented an opportunity to change that. It was ambitious, full of good ideas and supported by extra much-needed funding. So far, though, despite lots of positive rhetoric and some welcome action, the promised transformation has not been achieved. We believe it is still possible, but that will require the Government to maintain its focus on buses rather than letting its attention drift away.

The Government should set out clearly how it plans to evaluate the success of the National Bus Strategy across its various strands. It should also set out an indicative timescale for the scoping, consultation, and publication of future iterations of the Strategy.

Away from the National Bus Strategy, the sector is in a tough spot. Post-pandemic, many people’s lives have changed, and this has altered, perhaps permanently, when and where they wish to travel. Reduced patronage has left many services hanging by a thread, dependent on further extensions of the Government’s ostensibly short- Implementation of the National Bus Strategy 43 term recovery funding. Yet, in some areas and for some types of passenger demand has surged. So far, the Government has responded to this challenge with limited, albeit welcome, schemes such as the £2 fare cap. But it needs to do more. It would be the height of absurdity for the Government to spend billions of pounds to support the ailing bus sector through the pandemic and then allow it to wither away. The Government must continue to support the sector as it builds a new network fit for the post-pandemic world. This should be informed by a detailed analysis of the impact of schemes like the £2 fare cap and BSIPs. (Paragraph 117) 44 Implementation of the National Bus Strategy