Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Support local authorities to understand bus operating models, learning from franchising pilots
Conclusion
The Department has not yet provided local transport authorities with the information they need to understand the relative merits of different bus operating models, including franchising. Franchising (whereby local transport authorities take on more responsibility for bus services and award contracts to private operators) gives local transport authorities more control over bus services, but requires considerable time and investment, planning and commercial expertise, and introduces 4 significant financial risk to the taxpayer. Greater Manchester Combined Authority spent £134.5 million and took seven years to franchise its bus services. The Department is testing different franchising models which offer varying levels of cost, risk and opportunity, but franchising will not be the best solution for many areas. Local transport authorities do not have the information they need to understand the pros and cons of moving to a franchised network versus making the most of the current system of enhanced partnerships with operators. Significant improvements can be made through these partnerships, which can deliver many of the benefits that passengers want. For example, in Cornwall, the local transport authority worked with operators to co-ordinate bus and train timetables and introduce multi-operator tickets, with bus usage now 40% above pre-COVID levels. recommendation The Department should support local transport authorities to understand the benefits and risks of different models for running bus services and optimise how they work, including learning from the pilots of franchising models, providing guidance based on its review of enhanced partnerships, and promoting effective low-cost and no-cost approaches.
Government Response Summary
The government is supporting local transport authorities (LTAs) by providing guidance, including a handbook on regulatory models published in November 2025, and offering funding and active support for those exploring franchising. It plans to publish updated guidance and an Enhanced Partnership Manual with advice on improvements and best practices.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. bus services and share learnings, including through the Bus Centre of Excellence. It is also supporting and working with industry partners to provide shared guidance and advice, such as a handbook and toolkit for local transport authorities on the different regulatory models for running bus services, published by the Confederation of Passenger Transport in November 2025, with the support of the department and key local authority organisations. This provides: • an overview of the bus service regulatory models available for local authorities to choose from; • an 8-step framework for systematically working through the options and making a decision informed by evidence, expertise and stakeholder views; • supporting evidence and illustrations of relevant factors to consider; and • a multi-criteria decision analysis tool to score objectively various alternative ways of regulating bus services. The department commenced the franchising pilots programme earlier last year, with York and North Yorkshire and Cheshire West and Chester announced as participants in June 2025, and Hertfordshire, Cornwall and Cumbria announced in October 2025. The pilots aim to support local transport authorities in understanding which model of franchising is most appropriate for them, and particularly to consider what might work in rural areas. The department is also working to provide active support and funding to local transport authorities that wish to explore franchising. This funding will support implementation of measures in the Bus Services Act 2025 and help local authorities deliver franchising in a way that is tailored to local needs, if they choose to. The department will also provide support to local transport authorities that choose to deliver their bus services through an Enhanced Partnership (EP). Drawing on findings from the 2025 review of EPs, the department plans to publish updated guidance that sets out statutory requirements and processes, alongside actionable steps for designing, implementing, and improving EPs. The department intends to publish an EP Manual, which will provide advice on making improvements using low and no cost approaches and on the new requirements for provision of socially necessary local services and new minimum standards. It will also highlight existing best practices through case studies, examples and templates.