England ‘bus revolution’ will need more investment, Labour warned

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The UK government’s plans to launch a “bus revolution” by handing services to local control must be followed by significant investment to reboot the industry, regional leaders and transport executives have warned.

Transport secretary Louise Haigh on Monday outlined plans to give all local transport authorities across England new powers to run their own networks, including setting fares, routes and timetables, and contracting private companies to operate buses for a fee.

Haigh said the changes would overturn “decades of failed deregulation”, after Margaret Thatcher’s Conservative government privatised most services outside London in 1986.

“With local communities firmly back in the driving seat, our bus revolution will save vital routes up and down the country and put passengers first,” she said.

Operators have pared back unprofitable services in recent years, while councils have withdrawn some subsidies which propped up important local routes following cuts in central government funding.

Despite the number of people using buses in areas outside the capital declining in recent years, a trend accelerated by the Covid-19 pandemic, they are the most widely used form of public transport in the UK, and were responsible for 3.7bn passenger journeys in the year ending in March 2023.

Local government officials welcomed the additional powers, but warned that cash-strapped authorities would need new money to benefit fully.

“We recognise the challenges the government faces financially, but we hope over time that this important transfer of powers will be supported by further financial assistance from government to make the best use of the powers available,” said Adam Hug, transport spokesperson for the Local Government Association, which represents councils across the country.

Transport executives and local officials said the bus network was facing two funding cliff-edges in the coming months.

Central government subsidies to support a flat £2 cap on bus fares were scheduled to run out in December, they said, while funding allocations for local transport authorities to provide service improvements in England outside of London are set to end in April.

The announcement on Monday should be looked at “in combination” with the Labour government’s first Budget next month, to assess “how far this government will continue the trend of the previous government, which was to invest heavily in developing bus services”, said Graham Vidler, head of the Confederation of Passenger Transport, which represents operators.

The changes outlined build on 2017 legislation from the previous Conservative administration, which handed bus franchising powers to metro mayors in England.

Greater Manchester mayor Andy Burnham launched the first publicly run buses to operate outside London for nearly 40 years in September 2023, as part of an integrated transport system known as the “Bee Network”.

The network aims to emulate Transport for London’s approach by integrating the region’s buses, trains and trams under the direction of local government.

Regional authorities including West Midlands, South Yorkshire and Liverpool have also outlined ambitions to move towards the franchise model.

“Today’s announcement is really important, and while regulations are one thing, there needs to be a continued commitment to funding buses,” said Jason Prince, director of the Urban Transport Group, which represents the UK’s network of transport authorities.

Labour’s policy on buses stands in stark contrast to its rail reforms, where it has legislated to fully nationalise passenger services and bar most private companies from running services.

Private bus operators said they welcomed the government’s focus, but said regulatory changes could only go so far, and they called for efforts to reduce congestion to increase bus speeds and reliability.

“Our experience as a leading operator in London and across mainland Europe tells us that franchised operating models can deliver successful and integrated networks, when combined with measures that promote passenger growth and deliver sustainable investment,” said Alistair Hands, managing director regions for Arriva UK Bus.

Vidler also questioned whether some local authorities had been able to retain the institutional knowledge required to run their own transport operations, following year of cuts and outsourcing.

He predicted that in many cases, councils would continue to rely on the private sector to organise and run services.

“I think we will see a mixed economy, where in larger metro areas mayors are in control of an integrated transport system, and in smaller cities, towns and rural areas it is much more about a partnership and working together between the authority and bus operators,” he said.