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Buses and Taxis FAQs CBP-8734 (549 KB , PDF)
Who is responsible for policy on local public transport?
This is a wide-ranging policy area and covers matters as diverse as bus services, community transport, and taxis. Policy making in these areas is devolved in Scotland, Wales and Northern Ireland.
In England, overall policy is set by the Department for Transport (DfT). At a local level, a great deal of policy making now rests in the hands of elected ‘metro mayors’. There are currently ten of these, in:
- Cambridgeshire & Peterborough
- Greater Manchester
- Liverpool City Region
- North of Tyne
- South Yorkshire
- Tees Valley
- the West Midlands
- the West of England
- West Yorkshire
While DfT will set a policy framework, these mayors have varying levels of autonomy in deciding what policies to pursue (e.g. Manchester franchising its bus services, London introducing congestion charging).
Local public transport networks are managed by around 150 local authorities – county, unitary and district councils – and regional transport bodies like Transport for London and Transport for West Midlands.
The Department for Levelling Up, Housing and Communities (DLUHC) provides local authorities with the bulk of their general funding for buses, while the DfT provides discrete pots of capital funding.
In Scotland, Schedule 5, Part II, Head E of the Scotland Act 1998, as amended, prescribes those areas reserved to the UK Parliament; everything else is devolved. The 1998 Act was substantially amended in 2012 and 2016. There are no specific reservations regarding local public transport – buses, taxis, and community transport are all devolved matters for the Scottish Government. Recent reform in some of these areas was provided for in the Transport (Scotland) Act 2019.
In Wales, the original devolution settlement under the Government of Wales Act 1998 did not equip the National Assembly for Wales with primary law-making powers, and most transport policy remained under Westminster control. In 2014, the Silk Commission recommended that the National Assembly should move to a reserved powers model like Scotland. This was then enacted by the Wales Act 2017. Schedule 7A, Part II, Head E prescribes those areas reserved to the UK Parliament; everything else is devolved. There are no specific reservations regarding local public transport – buses, taxis, and community transport are all devolved matters for the Welsh Government.
Local public transport in Northern Ireland is completely devolved, governed by separate legislation and managed in a different way. The NI Department for Infrastructure is responsible for policy and bus services are operated by the state-owned Translink.
How are bus services in England funded?
In England outside London, bus services are funded through income from fares, and funding from central and local government. According to the National Audit Office (NAO), in 2018/19, most of the income bus operators received (59%) came from fare-paying passengers. The remaining 41% came from public funds.
The main ongoing sources of bus funding from central Government are:
- the Bus Service Operators Grant, a subsidy paid by the DfT, usually directly to bus operators
- the Revenue Support Grant from the Department for Levelling Up, Housing and Communities (DLUHC) paid to local authorities
Local authorities use the revenue support grant (the main un-ringfenced central government grant given to local authorities) to fund concessionary fare reimbursement to bus operators, and to fund ‘supported’ services.
Supported services are those that are not deemed commercially viable by private operators, and that have to be funded by local authorities if they are to continue. The Campaign for Better Transport (CBT) found that in the 10 years to 2018/19 there was a reduction of £400 million a year to supported services in England, and that in the nine years pre-pandemic, between 2011/12 and 2019/20, supported services in England had declined by 52% in terms of bus vehicle miles.
The CBT also estimate that commercial bus services also declined by 26% in the ten years between 2011/12 and 2020/21. Unlike supported services, most of that reduction came in the first year of the Covid pandemic, when bus ridership and fare revenue plummeted.
Other sources of ad-hoc central grant funding have been made available in recent years. These include:
- Bus Recovery Grant – The Covid-19 Bus Services Support Grant (CBSSG) was set up to support operators throughout the pandemic owing to reduced patronage. This was renamed the Bus Recovery Grant (BSG) which was originally due to end in March 2022. It was extended to October 2022 and then extended again to March 2023 with a further £130m of funding.
- BSIP funding – As part of the Government’s 2021 Bus Back Better strategy, the DfT asked all local authorities to develop a Local Bus Service Improvement Plan (BSIP) in 2021/22. Of 79 local transport authorities who submitted BSIPs, 31 are due receive central government funding of £1.153bn to deliver their plan.
- £2 Fare Cap – The UK Government subsidised operators across England to cap many single bus fares at £2, between January and March 2023, at a cost of £60 million.
Under the Government’s Bus Back Better strategy, from April 2022 onwards, future sources of funding will only be made available to local authorities which have either established ‘enhanced partnerships’ with operators, or a franchising scheme.
The CBT has been critical of the one-off, competitive nature of grant funding for buses which they say has resulted in the ‘usual suspects’ – local authorities with track records of winning grant funding – receiving funding compared to those that do not, or don’t even apply, which are often in areas with the poorest bus provision.
Why is the bus pass for older people available for those aged 60 in Scotland, Wales and Northern Ireland, but not in England?
Travel concession policy is devolved in the UK and there are separate bus concession schemes in England, Wales, Scotland and Northern Ireland. Each jurisdiction decides its own eligibility age – in Scotland, Wales and Northern Ireland this is currently 60.
In England, eligibility for the England national concessionary travel scheme (ENCTS) is linked to the rising state pension age. The Travel Concessions (Eligibility) (England) Order 2010 (SI 2010/459) increased the qualifying age for the ENCTS in England in line with the planned rise in the women’s state pension age (i.e. to age 65 by 2020). This later increased to 66, following an accelerated timescale for increases in the state pension age.
Eligible older people are defined in the legislation as follows:
- In the case of a woman, her pensionable age; and
- In the case of a man, the pensionable age of a woman born on the same day.
The costs associated with issuing passes at earlier ages are borne by the relevant administration – this also applies to those areas of England where people can receive a concession at the age of 60 (e.g. London).
It is up to the local authority to look at what the cost of extending the bus pass to the over 60s is, as it may well be that there is simply no money available for this.
To give some idea of the costs involved, in 2020/21 there were 8.9 million older people and disabled passes held across England and English Travel Concession Authorities (TCAs) estimated they spent around £1.07 billion on concessionary travel. This gives us an average figure for the cost of one bus pass as roughly £120.
The DfT has issued guidance on how local authorities in England should implement the ENCTS.
How are taxis and PHV services regulated?
In Great Britain, taxi and PHV licenses are issued by local licensing authorities, which are usually local councils, with the exception of TfL in London. In Northern Ireland taxi licences are issued centrally via the Department for Infrastructure and the Driver and Vehicle Agency.
In all parts of the UK, and for both taxis and PHVs, three licences are required: driver licences, operator licences, and vehicle licences.
According to the Local Government Association’s Councillor Handbook for Taxi and PHV Licensing, councils typically:
- set a local framework for the licensing of taxis and PHVs. This can cover fares, standards for drivers and vehicles and limits on the number of taxis that are allowed to operate;
- consider licence applications;
- issue, review and revoke licences;
- carry out inspections and take enforcement action.
Taxi licensing authorities in England and Wales are required to abide by Statutory Taxi and Private Hire Vehicle Standards, which are primarily aimed at safeguarding children and vulnerable adult passengers.Because policing and criminal justice is not a devolved matter, these standards (which were issued under the Policing and Crime Act 2017) will continue to have effect in Wales, even though responsibility for taxi and private hire vehicle policy was devolved to the Welsh Assembly in April 2018. Should the Welsh Government introduce legislation to regulate on these issues, the standards would cease to apply.
Licensing authorities and drivers in Wales must also abide by the conditions set out by the Welsh Government.
In Scotland, central responsibility for taxis and PHV licensing lies with the Justice Directorate of the Scottish Government (having moved from Transport Scotland, who were previously responsible) who have their own best practice guidance for licensing authorities. In England, the DfT has best practice guidance for licensing authorities, first published in 2010. In 2022 the DfT consulted on updating this guidance.
Under section 70 of the Local Government (Miscellaneous Provisions) Act 1976 councils in England and Wales may charge fees to cover the costs of their regulatory activities. However, councils are not allowed to use these fees to subsidise other forms of council activity, and are required to consult upon the fees they intend to levy through a public notice procedure.
The Government said in 2019 that there should be national minimum standards for taxi and PHV licensing in England, and that it will take forward legislation to introduce such standard when parliamentary time allows, a commitment it repeated in October 2022.
Other topics addressed in this paper
This paper also answers FAQs on the following topics:
Bus services: General
Definitions of local bus services; municipal bus services; the role of Traffic Commissioners; changes to bus routes; bus passenger behaviour; accessibility
Bus funding, fares and concessions
Bus funding; green bus funding; bus fares; contactless ticketing; bus passes, community transport
Taxis and Private Hire Vehicles
Regulation of taxis and Private Hire Vehicles; limits on taxi numbers; ‘cross-border’ taxis; minibuses; complaints
Further information on related topics can be found in Commons Library briefings on:
- Access to transport for disabled people,
- Taxi and private hire vehicle licensing in England,
- The National Bus Strategy: Bus policy in England outside London,
- Concessionary bus travel,
- Railways: Light Rail
- and the Transport topical page of the Commons Library website.
Documents to download
Buses and Taxis FAQs CBP-8734 (549 KB , PDF)
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