Conclusion 2

The Department’s funding for buses has been short-term, fragmented and poorly targeted, hindering effective investment in the sector. Over the period 2019–20 to 2024–25, the Department provided funding to the bus sector via 13 different grant schemes. Most of these were short-term allocations, which has hindered local transport authorities’ ability to make effective investments in bus service improvements. Funding per head has varied significantly across the country because of the Department’s decision to allocate some grants competitively. Mayoral combined authorities received significantly more bus service improvement funding (£34 per head) than county councils (£19 per head). The Department plans to distribute funding more equitably, but it has not fully considered how this should reflect the challenges of providing bus services in rural areas. The Department has taken some steps to simplify bus funding, for example by combining some grants to local transport authorities, but work to reform its main grant to bus operators has 3 been ongoing for 12 years. Considering the financial pressures on local authorities, there is no guarantee that funding from the Department will be spent on buses if it is not ring-fenced. recommendation The Department should, in its Treasury Minute response to this report, update the committee on its progress towards providing longer-term, consolidated funding to the bus sector and explain when it will be able to detail its plans more fully. This should include how it will reflect the additional challenges for rural areas and how it will ensure funding for buses is spent on buses.