Buses after the General Election

In the not-so-distant past, buses in Britain were largely considered a local concern, with the market providing the lion's share of services outside London, and local authorities stepping in to subsidise a modest number of routes deemed socially necessary but commercially unviable.

However, the landscape of public transport, particularly bus services, has recently undergone a significant transformation, with central government adopting a more active role in providing capital and revenue funding. In return for this funding, local transport authorities are seeking greater control over services and fares.

As we look to the future, the outcome of the General Election will be pivotal for the direction of local public transport. The emerging victor, whether a single party or a coalition, will inherit a landscape where many authorities are transitioning to franchising models, while others are striving to extract the best value from enhanced partnerships with operators.

There are five critical areas to consider in this evolving scenario:

1) Delivering improvements for customers: Despite relatively stable and generally high customer satisfaction levels, there is notable variation across regions and journey attributes. Satisfaction with value for money, waiting times, and punctuality scores are noticeably low. In some areas, services have been hampered by traffic congestion, reduced infrastructure maintenance, and personnel shortages. Additionally, reductions in overall bus service miles over the past decade have left some communities without access to public transport, exacerbating transport-related poverty and hindering decarbonisation efforts. This has, in turn, created an environment of declining patronage that further reduces the ability to provide services commercially. Delivering improvements across service provision, fares, and reliability is high on the public's agenda. However, this is contingent on understanding the value these services provide and securing new funding.

2) Decarbonising the fleet and assets: The technical and political challenges of decarbonising local transport are significant. Investment is needed to overcome barriers to electrification, including the availability of charging infrastructure and navigating difficult conversations on modal priorities. Local authorities will need to collaborate with the private sector to find workable solutions and communicate the benefits of low-emission zones and the transition to zero-emission buses.

3) Addressing the financial sustainability challenge: While delivering improvements for customers and decarbonising the fleet are key objectives, the ability to deliver will depend largely on the financial health of local transport authorities (LTAs) and transport operators. Passenger revenues have not fully rebounded to pre-pandemic levels, and operating costs, particularly for labour and fuel, have surged. In many areas, capital budgets are high and revenue budgets are low. Greater flexibility to reallocate spending would therefore be helpful. Without this flexibility and without continued revenue support through initiatives like the Bus Service Improvement Plans (BSIP) and the £2 single bus fare, LTAs and operators will face difficult decisions regarding fares and service levels. This could impact their financial and reputational standing, as well as their ability to deliver for customers, creating a disconnect with expectations.

4) Setting out long-term funding: The government has committed substantial capital and revenue funding for local transport through City Region Sustainable Transport Settlements (CRTS) and BSIP, as well as new funding for operators via BSOG+ and the £2 single bus fare cap. However, with competing demands from other policy areas such as health and defence, these headline figures are vulnerable. Authorities may need to explore new longer-term sources of funding, which would require additional powers. Where additional funding is needed (i.e., most areas), authorities and operators will need to make the case and demonstrate their contribution to economic, social, and environmental wellbeing.

5) Ensuring effective arrangements across organisations: The bus sector brings together private operators, transport authorities, and local and central government in a complex set of contractual and partnership arrangements. Local success will only be achieved where efficient structures are in place that enable the best of the private and public sectors, unlocking effective value. This means working to best practice approaches and ensuring these are shared, understanding local market challenges and developing solutions that address them, with prioritisation to support long-term sustainability.

There is a lot to do, and much needs to be done in a new way, with greater involvement of local authorities in the specification and funding of local bus services, and greater involvement from central government in sponsorship, providing advice and monitoring outcomes. There will be successes and failures along the way. It is important that everyone involved is open about progress so that collectively we can learn lessons. With strong partnership working, the pragmatic nature of all those involved with local buses will find solutions, but we should be prepared for one or two bumps in the road ahead.