Bus policy in England

Decline in bus use

Buses remain the most used form of public transport in England. However, bus journeys have been in decline for many years in most of England, and dropped from 4.6 billion in 2009 to 3.6 billion in 2024.

Journey numbers have also yet to recover to pre-covid levels. In the year ending March 2024, bus use was around 12% lower than the year ending March 2020.

Public funding accounts for 44% of all bus industry income in England, with the rest coming from fares. This is similar to pre-pandemic levels of funding.

Bus mileage is used as an indicator of how many bus routes there are. In England outside London, bus mileage in the year ending March 2024 was around a quarter (29%) lower than in 2005. London bus mileage has remained fairly stable over the same period.

Management of bus services

Since the passage of the Transport Act 1985 under the Thatcher government, bus services outside London have been deregulated. This means that most bus services have been run on a commercial basis by private bus companies which can determine routes, timetables and fares.

The role of local transport authorities is limited to:

• providing infrastructure like bus stops and bus lanes
• providing some finance, like reimbursing bus operators for concessionary bus travel by older or disabled passengers
• funding some ‘supported’ services which are not commercially viable

Enhanced Partnerships

The Bus Services Act 2017 gave local authorities powers to introduce bus franchising or enter into ‘Enhanced Partnerships’ (EP) with bus operators. However, by 2021, hardly any authorities had used these powers. In 2020, the National Audit Office argued that these powers made little difference, and said a lack of funding was the main problem.                                                                                                                        

An EP scheme entails an exchange: local authorities, for example, may agree to fund bus lanes, parking restrictions or other facilities which make bus services more attractive and profitable. Operators, in return, agree to a set of standards, such as on the time and frequency of services and vehicle standards.

In 2021, the Conservative government’s National Bus Strategy mandated local authorities to set up either a franchising scheme, or an Enhanced Partnership (EP) with local bus operators. If they did neither then they would not be eligible for future discretionary bus funding from the Department for Transport (DfT). Almost all local authorities have, so far, chosen the EP option.

Franchising

Franchising is where a local authority has far more control over bus services. The authority specifies the local services it wants – routes, services, fares, vehicle standards and so on – through contracts with operators. Operators compete through a tendering process for the right to operate services in an area, and get a set fee for delivering a service.

The main example of bus franchising in the UK is Greater London, which was exempt from the deregulated model introduced under the Transport Act 1985. Transport for London (TfL) sets the routes, services, fares and vehicle standards for buses in London, and retains all the revenue from fares. Bus companies compete through a tendering process for the right to operate TfL services for a set fee.

Franchising outside London

The Conservative government legislated under the Bus Services Act 2017 to allow Mayoral Combined Authorities (MCAs) outside London to franchise their bus services and regain control of routes, timetables and fares, in a similar way to TfL. MCAs can instigate franchising without the consent of the Secretary of State, while all other councils must obtain this consent first.

Greater Manchester Combined Authority (GMCA) used these powers to start its own ‘Bee Network’ bus franchising system in September 2023, which is expected to cover the entire Manchester city-region by January 2025.

The MCAs of Liverpool City Region, West Yorkshire, and Cambridgeshire & Peterborough have also signalled an intention to introduce franchising.

Industry commentators have warned that franchising is not suitable for all areas. Even where it might be, it involves financial risk for local authorities, many of whom may, after decades of de-regulation, lack the capacity and skills required to manage a bus network.

Better Buses Bill

In the 2024 King’s speech, the new government pledged to introduce a Better Buses Bill. The government has said the bill will give more councils (and not only MCAs) powers to introduce bus franchising, remove the ban on new council-owned bus companies (which was introduced by the Bus Services Act 2017), and reform bus funding.

The government has said the bill will allow other parts of England to emulate the success of Manchester’s bus franchising scheme, while catering for councils that do not opt for a franchising model:

These new powers mean local transport authorities will now be able to emulate the huge success of publicly controlled buses in Greater Manchester and London. Greater Manchester’s successful Bee Network has already seen passenger numbers grow by 5% since public control began to be rolled out just a year ago.

The Buses Bill will also reverse the ban on setting up new publicly owned bus companies, provide greater flexibility over bus funding and will take steps to improve bus services for communities who choose not to pursue public control.

The bill is expected to be introduced by the end of 2024.

The government has yet to make clear how many councils might take advantage of the new franchising powers enabled by the bill, or if any additional funding will be made available alongside it.

Bus funding changes

England’s national £2 bus fare cap has been subsidised by the DfT since January 2023, and was set to expire at the end of 2024. In the October 2024 budget, the government said it would raise the bus fare cap to £3 and extend it to the end of 2025, at a cost of £151 million.

In the budget, the government said it will also provide £925 million for local authorities to “introduce new bus routes, make services more frequent and protect crucial bus routes for local communities.” Final allocations announced on 17 November came to a slightly higher total amount of £955 million.

The local authority allocations have been published online showing that:

• £670 million will be paid to local transport authorities to deliver their Bus Service Improvement Plans (BSIPs), and
• £285 million will be paid through the Bus Service Operators Grant (BSOG), a fuel subsidy to bus operators.

The funding is for the year 2025/26. All local transport authorities in England will receive some funding. Funding amounts have been calculated based on “place need, levels of deprivation and population”. This allocation process is in contrast to the 2022 BSIP funding round under the Conservative government where local authorities competed for funding.

Further reading

The following Library briefings have more information on buses:

• Buses and Taxis FAQs
• Concessionary bus travel
• Access to transport for disabled people

Correction

On 29 November 2024, the figure for public funding as a percentage of all bus industry income was corrected from 57% to 44%.