Buses: Funding

With permission, Madam Deputy Speaker, I wish to make a statement on the steps that the Government are taking to ensure that bus travel remains accessible and affordable for everyone, while bearing down on the cost of living.

Let me start by summarising the situation as we find it. People across the country are facing massive cost of living pressures following Russia’s illegal invasion of Ukraine. That is why we have a commitment to halve inflation this year to ease the cost of living and give people greater financial security. For the bus sector, that comes on the back of a global pandemic that saw passenger numbers drop to as low as 10% of their pre-pandemic levels. However, bus journeys are now recovering to around 90% of their pre-pandemic levels outside of London. Taking the bus remains the most popular form of public transport, and millions of people rely on these vital services every day.

Local bus networks provide great access to work, education and medical appointments, driving economic growth across the country. They can be a lifeline for those for whom travelling by car or other forms of public transport is simply not possible. That is why over the past three years we have invested more than £3 billion to support and improve bus services in England outside of London. That level of investment was a sign of the times, but today, we need to move out from underneath the shadow of covid-19, where the sudden absence of passengers made it necessary for the Government to step in, first through the covid-19 bus service support grant, and later through the bus recovery grant.

We face a challenge to return the network to its pre-pandemic footing while confronting fundamental changes to travel patterns, but buses remain a critical part of our transport infrastructure for many people, especially outside London in suburban and rural areas. Billions in Government funding has been made available to keep fares down and to keep services up and running. Bus routes have been kept alive where they may have proven so uneconomic that they risked being scrapped altogether. Without them, whole communities would have lost out, risking people becoming totally disconnected, especially older and more vulnerable people. While we have seen overall patronage recover to around 90% of pre-pandemic levels, concessionary fares continue to lag significantly behind. We recognise that we can maximise opportunities to bring concessionary passengers back to the bus, and I will return to that point later.

Supporting bus services at their lowest ebb was the right thing to do. However, if the public purse alone props up bus services, that would not be a funding model; it would just be a failing business. It is not the business of this Government to allow our buses to fail. We must reform bus funding in the long term, and we will work with the sector to better understand the impact before moving ahead with any implementation. We must adapt to new levels of patronage, acknowledge that there are extremely challenging financial circumstances and balance the needs of taxpayers, the travelling public, operators and local authorities. All parts of the sector have their role to play.

The Government will play our part. Today, I can announce a long-term approach to protect bus services, keep travel affordable and support the bus sector’s long-term recovery. I can announce that the Government will provide: an additional £300 million over the next two years to protect vital routes until April 2025; £150 million between June 2023 and April 2024; and, another £150 million between April 2024 and April 2025.

Some £160 million of that funding will be earmarked for local transport authorities through the new bus service improvement plan plus—a mechanism to improve bus services while empowering local authorities to make the call on how services are planned and delivered. It comes in addition to the existing £1 billion of funding through the national bus strategy that has already been allocated. BSIP+ will be focused on communities that did not previously benefit from BSIP allocations. In addition, a further £140 million will be provided to operators through the bus service operators grant plus mechanism, supporting them with the services they run.

This package means that passengers can continue to rely on their local bus to get around. Alongside it, we will consult with operators and local authorities on measures to modernise and futureproof bus funding for the long term. This is part of the Government’s vision to improve connectivity through the bus services that this country relies upon. This funding and our bus vision will grow the economy, creating better-paid jobs and opportunities in every part of the country.

At a time when the cost of living is a challenge for many, we also recognise that price is a key barrier to growth. The more affordable travel is, the more likely passengers are to get on board. We understand that every penny counts. The Government stepped up during the pandemic with support for businesses and their workers with low-cost loans and, most vitally, the furlough scheme. Following Russia’s illegal invasion of Ukraine and the knock-on inflation caused by the energy price shock, we again stepped up. We have delivered an energy package of more than £90 billion, literally paying half the energy bills of households across the country, with extra support for the most vulnerable. We will halve inflation this year to ease the cost of living pressures and give people financial security. We will grow the economy, creating better-paid jobs and opportunity right across the country.

In transport, we also understand the pressures placed on people’s finances. That is why we cut fuel duty by 5p a litre, kept train fare rises significantly below inflation and introduced the “Get Around for £2” bus scheme nationwide and provided the funding for local authorities in Greater Manchester, West Yorkshire and elsewhere to do the same. The nationwide scheme was initially for three months until 31 March this year. I then extended it until 30 June. Today, I can also inform the House that the Government will provide a further £200 million to continue capping single fares at £2 in England outside London until 31 October 2023. After that, we will continue to support bus passengers with the cost of living. We will replace the £2 cap with a £2.50 fare cap until 30 November 2024, when the Government will review the effectiveness of future bus fares.

Since the £2 cap was introduced, it has saved passengers millions of pounds, boosted businesses and put bums on bus seats across the country. This decision builds on the Government’s help for households initiative and supports everyone through the cost of living increases, especially those on the lowest incomes, who take nearly three times as many bus trips as those on higher incomes. It puts money back into people’s pockets and keeps them connected to key local services. It encourages millions of passengers to get back on the bus by knocking close to a third off the average single fare, and more for longer journeys. Taking that forward, my officials will work with the sector to confirm operators’ participation in the scheme. We will also undertake a review of bus fares at the end of November 2024 to support the sector in moving to a sustainable, long-term footing.

In conclusion, what I have shared with the House today is part of the largest Government investment in bus services for a generation. It exceeds our bus back better commitments by half a billion pounds, providing certainty to industry, securing value for taxpayers, protecting access to vital public services, delivering our priority to grow the economy, and helping people with the cost of living. All the while, we will work with the sector to reform bus funding in the long term. We will work towards affordable and reliable bus services for everyone, everywhere, all at once. That is what the travelling public deserves, and that is this Government’s ambition. I commend this statement to the House.

I call the shadow Secretary of State.

Thank you, Madam Deputy Speaker, and I thank the Minister for advance sight of his statement.

Our bus services are in crisis. Bus users across the country listening to the statement today—waiting for a bus that never turns up and robbed of a service they depend on—will be wondering, frankly, whether the Minister is oblivious or in denial, and whether he understands the scale of the Government’s failure, even on their own terms. His party made promises that voters were entitled to think would be kept.

Two years ago, in the middle of the pandemic and when its effects were well known, the Conservatives launched their bus back better strategy. With great fanfare, they pledged a great bus service for everyone, everywhere. They promised it would be one of the great acts of levelling up. They pledged buses so frequent that people would not need a timetable. They said the Government would

“not only stop the decline”—

in bus services, but

“reverse it”.—[Official Report, 15 March 2021; Vol. 691, c. 50.]

Those promises made long after the effects of Covid were clear, and what has happened since? Last year, services fell by the second fastest level on record. Today, there are fewer buses on the road than at any time on record. Of the 4,000 zero-emission buses the Minister’s party promised, just six are on the road. Can that really be what the Prime Minister means by “delivery, delivery, delivery”? For bus passengers across the country, it sounds like “failure, failure, failure.” They are counting the cost of a party that simply has not kept its word and of 13 years of Conservative failure. In that time, 7,000 bus services have been axed. Those services were indispensable for connecting people to jobs, opportunities, friends and family. These lost connections have held back our economic growth, worsened our community life, and deepened our productivity problem. The Government promised transformation, but they have delivered a spiral of managed decline. Today’s announcement does nothing to stop that.

It was delightful to hear the shadow Secretary of State’s prepared attack lines, because I do not think she actually listened to the statement. We are exceeding the bus back better commitment by £500 million. I note that the hon. Lady did not mention the fact that Sheffield city region is getting £3.15 million today—[Interruption.] If the hon. Lady would let me speak, rather than shout at me from a sedentary position, she might actually learn something. Stoke, which she mentioned, has already had £31.6 million in BSIP funding. Hampshire, which she also mentioned, is also getting £3.6 million today.

The hon. Lady talked about her plan for the devolution of powers, but we have already done that. She does not seem to be paying any attention to what is happening in her own area of South Yorkshire, which has received £570 million. Greater Manchester is receiving over £1 billion over five years. That was never delivered by Labour in government, but delivered by this Conservative party right across the country. There are sustainable transport schemes and city region sustainable transport settlements—all delivered with money from this Government—[Interruption.] She shouts that this is about Labour Mayors, but we have done deals with Conservative Mayors and Labour Mayors. I do not care about party politics; I want to deliver for bus users right across this country.

That is different from the ideological approach taken by the hon. Lady, who seems to think that if everything was under total state control, everything would be better. We know from the past that that is not true. We want to deliver for people up and down the country. That is why we are extending the £2 bus fare, delivering for people on the lowest incomes right across the country. I know that the hon. Lady is in the pocket of the train drivers’ unions, but I suggest that she stand up for working people right across the country, the majority of whom use bus services.

I call the Chair of the Select Committee on Transport.

I warmly welcome this announcement, not least because the Minister has taken on board the recommendations made in the Transport Committee’s March report on the national bus strategy. It is right to focus on the necessary longer-term reforms, and I particularly welcome the intervention on BSIPs, which the Committee found were a mixed bag across the country. Some are working very well, but other authorities were not able to deliver a good plan. Will the Minister assure me that his officials will work with local authorities to design good new bus strategies for the areas that do not have one?

I thank the Chair of the Select Committee for his question. He is absolutely right to point to bus service improvement plan funding as part of the package. We pledge to work with those local authorities, and will continue to do on delivering enhanced partnerships or franchising, depending on what they would like. My hon. Friend’s area of Milton Keynes will be getting £654,000 this year from the bus service improvement plan, which can go towards delivering the local services that are most under threat and protecting them for the future. The area will also benefit from the “Get Around for £2” scheme extension, and the £2.50 fare extension. Beyond that, on top of the money going directly to local authorities—not mentioned by the hon. Member for Sheffield, Heeley (Louise Haigh)—local operators across the country will be provided with money this year and next, including franchise operators in places such as Greater Manchester.

I call the SNP spokesperson.

In principle, I welcome today’s announcement on fares by the Government. Anything that helps to make bus travel more attractive and drives modal shift is to be welcomed. [Interruption.] Just wait—there’s more!

In Scotland, we have taken a different approach, and extended free bus travel to include every Scottish resident under the age of 22. The feedback thus far is that we are seeing a big increase in travel among those groups, getting them in the habit of taking the bus and normalising public transport. However, when it comes to real investment and spending on bus infrastructure, I am afraid the DFT is still lagging well behind. Of the 3,500 buses farcically claimed by the UK Government as helping meet their target of 4,000 zero-emission buses for England outside London, nearly a fifth are funded by the Scottish Government, over whom the Minister has zero jurisdiction. He is using the success of the Scottish Government and others to cover for their own failure.

Incidentally, four weeks ago the Secretary of State promised the House that he place a letter in the Library setting out the details of the pledge and of delivery thus far, but we are yet to see that letter placed in the Library.

In Scotland, ScotZEB 2—the Scottish zero-emission bus challenge fund 2—was announced just this week, providing another £58 million to further enhance and improve bus services across the country, including in my own constituency. This will bring Scotland’s zero-emission bus fleet up to about the equivalent of 8,000 buses in England. In contrast, of the 1,342 buses in England outside London claimed as funded under the ZEBRA—zero-emission bus regional areas—scheme, only six are on the road. If I looked out of the window of my constituency office in Renfrew, in 15 minutes I would see more zero-emission buses passing by, serving passengers and contributing to the net zero transition, than are actually on the road through this Government’s ZEBRA scheme.

I thank the hon. Gentleman for his opening remarks, and I will address some of his later ones. On the Barnett consequentials—just to start off with that—all this money has been found within the Department for Transport. We are cutting our cloth without asking for more cash from taxpayers, which is exactly what we need to be doing in this situation.

It is interesting that the hon. Gentleman concentrated on talking about the ZEBRA scheme, which is not really the topic of today’s statement. It is interesting that he did not mention anything else because the Scottish national party is obviously not matching our £2 bus fare right across Scotland, which is quite a surprise. [Interruption.] Only people under the age of 22, the hon. Gentleman shouts at me, have free bus travel. People do not have that in Scotland; actually, it has no £2 fare cap at all. That is something we are delivering this year and will be continuing to deliver next year here in England.

In fact, one of the major bus operators spoke recently about the crisis of buses in Scotland due to the Scottish Government’s

“mix of ill-informed emotion and political dogma”,

while failing to help them meet the needs of reliant Scots—

Let’s hear the name.

The hon. Gentleman can look it up online. I can understand why he would want to ask questions of us, but I think he needs to ensure that the Scottish Government get their own house in order first.

Today’s announcement is welcome, especially given that in my own constituency we have seen a vital rural route—the 155—withdrawn, removing connectivity and unfortunately increasing loneliness, particularly among the older population. There is another route—the 638—which is a school service, that is under threat, causing great angst for those who use it. The extra funding for Kent and Medway is appreciated, but could the Minister confirm when he expects the money to be allocated in order for the local authorities in Kent and Medway to plan ahead for the next academic year and save the 638 from being scrapped?

I thank my hon. Friend for her question. She is indeed right that Kent and Medway will be getting extra support. In Medway, that amounts to over three quarters of a million pounds. Across Kent, on top of the almost £19 million it has already had from its first BSIP, the council will be getting an extra £2.3 million as a result of this announcement. On top of that, she will also see local bus operators receiving similar amounts of money, so she will see multiple millions of pounds for her local bus services. On when the cash will get paid, I will write to her directly. It will come in tranches at different stages, and I will happily lay that out in a letter to her. However, she can reassure her constituents that money is available and that cash is coming in, and that the local council as well as local operators will be able to use that money to fund the vital local services she mentioned.

I look forward to discussing these issues in much more detail in my Adjournment debate on Government funding for local bus services this evening. The Minister will know, because we have neighbouring constituencies, how important bus services are to our constituencies and how absolutely essential it is to keep them, and he must know that this money will not be sufficient to maintain those services. This morning, the Minister claimed he was not going to pretend he can save every bus route. Can he confirm how many bus services he is willing to lose?

I would like to thank the hon. Lady for her question, and we will be able to go into this in greater detail later. As she knows, hers was the first ever Adjournment debate I did, and I am looking forward to doing one with her again tonight. [Interruption.] Well, what has changed, despite the comments of the shadow Secretary of State, is that the north-east has already received £117 million of its £163 million of BSIP funding, and in addition it will also be benefiting today. I spoke to the leader of the hon. Lady’s council, Councillor Gannon, earlier today, before I came to the House, and talked him through the BSIP funding for the future. I would say that we obviously cannot protect every route—some routes will need to change—but the funding being delivered today will be hugely important to her and my constituents. Gateshead has had the levelling-up fund bid for more than 50 electric buses, with £100 million already and more to come with the bus service improvement plan across the north-east. Only last week, £1 bus fares were rolled out across the north-east for under-22s, thanks to the funding from the Government. That was never delivered under the last Labour Government, and I would have thought she would welcome more cash being available.