PARLIAMENTARY DEBATE
Buses: Funding - 17 May 2023 (Commons/Commons Chamber)

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.

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.

Today, we are delivering £500 million of extra support and for an extra two years, not only for the cost of living, but for bus services right across the country. I think the hon. Lady would do well to follow our example and think of the long term, rather than ideological and political attacks.

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 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—

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.

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 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.

I thank my hon. Friend, who raises a vital point. Some £31.6 million—one of the highest per capita amounts anywhere in the country—was given to Stoke-on-Trent City Council, which now needs to deliver on its plans. My Department stands ready and willing to work with it, including on any flexibilities, as it sees the situation change. His constituents will also benefit from the £2 bus fare cap this year and the £2.50 bus cap next year, and his operators will benefit from the extra financial support over the next two years, providing long-term sustainability for those local bus services.

As I said in my statement, every area that did not get bus service improvement plan money will be getting it this time, including both Cheshire East Council and Cheshire West and Chester Council. That will amount to more than £2.4 million—almost £2.5 million—for those local authorities to help them with bus services. On top of that, the local bus service operators will be getting BSOG plus, which will help them with route maintenance and expansion, if they feel they can do that. This is really good news for the hon. Member’s area, with the Conservatives delivering for the people of Cheshire.

My hon. and learned Friend is absolutely right. We need to look at the needs of buses, and the needs of the communities he serves, particularly rural communities. When bus service improvement plans were brought forward they went to specific areas, but they also ensured that somebody within the Department for Transport was working with local authorities in those areas to ensure a viable plan. I am obviously happy to continue to work with my hon. and learned Friend, especially with the extra money allocated, potentially to consider further interesting and innovative schemes, such as the demand-responsive buses he mentioned.

We are always prepared to consider different proposals, and I welcome the hon. Lady’s comments about extending the £2 bus fare across England. It is great to get Opposition support for that. I would also point to some of the positives that are happening across the West of England Combined Authority area, such as the £570 million of long-term funding to help improve services. There have been huge upgrades there, and coming over the next few years. A recent £7 million package of improvements in Bath means that buses run every 15 minutes, but we are always happy to look at further developments in the future.

I thank my hon. Friend. She is right to say that Derbyshire was one council area that got a significant amount of funding in the initial bus service improvement plan allocations. That will be used to help improve bus services, and I reassure her that that funding is flexible and able to meet needs as they change following the pandemic, and changing patterns of travel. I also reassure her that in addition to that money, all her constituents will benefit from the extension to the £2 fare cap, and the £2.50 fare cap. Bus operators across her constituency will also benefit from the BSOG.

I am glad the hon. Gentleman welcomed the more than £3 million extra, on top of the £570 million we have already awarded to the city region, the major £44 million regeneration for South Yorkshire’s transport system that we announced, the £16 million for a planned fleet of electric buses for Sheffield and South Yorkshire, and the £8.4 million of ZEBRA funding. With a Labour Mayor running his city region, he will know that it is up to local authority leaders, including an elected leader in his area, to decide exactly how they allocate the money and what they want to do. In South Yorkshire car ownership has risen over recent years, and how that is managed is up to local leaders to determine. We are providing the funding, and it is up to local leaders to decide what they do with it.

My right hon. Friend will know that there is currently a total cliff edge in Wales on 24 July—no plans for the future; no long-term plan, such as that in England with two years of extra funding; no £2 bus fare; and it is all under the devolved authority for 23 years of the Labour-controlled Welsh Government. I obviously want them to do something similar to what we have done in England, because bus services are vital, particularly for elderly or lower paid people, and for young people and students going to college and university. I ask them to think again about the way they treat not just buses but roads in general. We need proper long-term investment. But again, it is up to them how they spend their money.

I thank the hon. Gentleman for her interest in my local social media posts. This Government, unlike the previous Labour Government, have already provided £117.8 million in bus service improvement plan allocations. I do not know whether she noticed the response I gave to the hon. Member for Blaydon (Liz Twist), but earlier today I spoke to Councillor Gannon, who runs the North East Combined Authority’s transport scheme, and he welcomed what we are doing. On top of that there is more money to come, and the £2 bus scheme announced today. But it is not all about that; this is about protecting local services. I am sure that when she—[Interruption.] When the hon. Lady looks at the amount of money—[Interruption.] She has called me far worse in the past on the House of Commons terrace, as we all know, and I thank her for her unreserved apology for that at the time. We are putting in investment that the Labour party never did, and when she looks at the moneys going into Go North East and Arriva North East over the next few weeks, she will see how much they are getting and how that should benefit local users across the great county of Durham.

My hon. Friend is right about accessibility, and I am fully aware of the issues he has raises with Trimdon. On accessibility more broadly, he should be reassured that with audio-visual alerts on buses we really are rolling out those upgrades right across the country to make buses more accessible to as many people as practically possible. He is fully aware of the £163 million pledged to the north-east for the bus service improvement plan, and I am looking forward to working with him, particularly on the cash allocated to County Durham, to see how we can ensure that, in particular, those delisted rural former pit villages really get the services that they need so that opportunity is spread across our beautiful constituencies.

The hon. Member will be fully aware that this Conservative Government have already allocated £94.8 million to Greater Manchester through the bus service improvement plans, on top of £1 billion to Greater Manchester for the city region sustainable transport settlement. On how buses are operated, he will be fully aware of the desire of the Mayor of Greater Manchester to go to a franchising model, which the Government have allowed and are supportive of. I look forward to working with him and any other local authorities that wish to move in that direction. What I will say, however, is that franchising services means that local taxpayers end up carrying a much greater portion of fare box risk. People need to be able to justify that to their local taxpayers.

I thank my hon. Friend for mentioning Norfolk. It was wonderful recently to visit his fantastic constituency as well as that of my neighbour, my hon. Friend the Member for North Norfolk (Duncan Baker), to see some of the improvements happening in terms of bus funding. I have said to all councils that, if flexibility is needed from their initial BSIPs, we are always willing to look at that. I am grateful to my hon. Friend for raising Norfolk, where there has been a really proactive county council driving forward bus service improvements as well as improving its road network, which is another issue that I know he cares deeply about.

The key thing is that we have provided tens of millions of pounds a year for the next few years for bus service operators right across the country. While the Opposition bang on with their ideological battles about who owns the services, I am interested in getting services delivered for the people. Already across the West of England Combined Authority area, £105.5 million has been made available as part of the Government’s plan to deliver bus service improvements. I have already said to the hon. Member, as I have said to all the Metro Mayors I have managed to speak to today, that I am willing to look at their bus service improvement plans and to be flexible with them if they want to change how they are operating things.

I thank my hon. Friend for mentioning Cornwall. I had a fantastic visit there with her recently to see “Love the bus” and services locally. Cornwall Council has done exceptionally well with its initial £13.5 million bus service improvement plan and it will be getting just under another £2 million as part of this extra allocation. Cornwall is a great example of enhanced partnerships working really well to deliver for people, with more bus users and the £2 bus fare saving millions of pounds for local residents and tourists who visit Cornwall every year. I urge Opposition Members to look at Cornwall as a good example of where enhanced partnerships can really work to deliver for people and local businesses. This is not an ideological approach but one based on delivering for local people.

My understanding is that there is no plan for more money from Labour, and there was no plan for more money for buses today from Labour. That is just like what we see in Labour-run Wales, with no plan for the future. In fact, it is particularly interesting that the Leader of the Opposition recently stated that Labour-run Wales is a model for the Labour Government. What we see here is a Conservative Government actually delivering for people across the country.

The hon. Lady talks about powers. I am happy to work with the increasing devolution across the country, as I have done with the Mayor of Greater Manchester, which has had more than £1.07 billion in city region sustainable transport settlement funding, £94.8 million from the BSIP and more than £200 million for Transport for Greater Manchester and the commercial bus operators. I have said that I do not mind the model; she is obsessed with it.

I thank my hon. Friend for his question. He is absolutely right. In Labour-run Wales and SNP-run Scotland, bus fares are uncapped. In England they are now capped at £2. I point out that on top of £18.7 million of BSIP funding, Nottinghamshire County Council will receive another £1.2 million directly. On top of that, further money will be going to his bus operators locally to enable them to provide and enhance local services.

That is up to the Mayor of South Yorkshire and his decisions.

I thank my hon. Friend for his question. In England we have found money for buses from within our budgets, so I definitely encourage other parts of the United Kingdom to do the same. In Wales we have sadly seen a far too ideological approach, including changing speed limits across the country at an estimated cost of £32.5 million in implementation alone and potentially with major economic costs knocking on. The 15% that he mentioned in Wales is on top of what has already been lost. Wales cannot be a model for the future, and the Welsh Government really should look to the support that we are providing in England, including those lower-cost fares for young people, to deliver for people across the country.

The £2 scheme is England-wide, so that has been allocated by central Government. The cash going to local bus service operators—the bus service operators grant—is there for them to support their services. More broadly, the West of England Combined Authority has had £105.5 million. That is what it bid for, and it chose the schemes it wanted to do. I am prepared to ensure that there is maximum flexibility to preserve and enhance bus routes wherever possible. If the metro Mayor would like to speak to me further—I tried to call him today; he sent me a message to say that perhaps we would speak later—I would be very happy to speak to him about that and to have my civil servants work with him.

I thank my hon. Friend for his question and the charming way in which he put it. I was delighted to visit Warrington with him recently, and I will continue to work with him to press the local council to get on with the job and deliver for the people of Warrington, just like he does every day.

The hon. Gentleman asks about franchising. As I have said, I am not ideological about that, unlike the hon. Member for Sheffield, Heeley (Louise Haigh). My hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) mentioned her fantastic bus network in Cornwall, which is run by an enhanced partnership. I understand that it is quite difficult for the Labour party not to be ideological about these things. What I would say is this: do what works for your area, just like we are doing in the north-east of England, where we are working with local operators to deliver for local people.

I thank my hon. Friend for that question. I was delighted to visit Watford with him recently. I reassure him that on top of the £29.7 million that is going to Hertfordshire more broadly, there will be another £1.5 million of funding for the council following today’s announcement and, on top of that, the bus operators will be getting money to support local services. I encourage them to use the enhanced partnership money as an opportunity to work even more closely with local authorities to ensure that bus service users get to know first about any proposed changes.

I visited the hon. Lady’s constituency just before she was an MP and I am sure I will be doing so again. The £2 bus fare is operating right across the country. On top of that, we have concessionary fares for retired and disabled people. Those are there across the piece. Bus operators in Shropshire will be getting significantly more money. Shropshire Council did not get the initial round of BSOG funding, but I am delighted to let her know today that it will be getting £1.5 million to support local bus services. I hope she will use her offices to ensure that that is spent on local people so that they get the services they deserve.

I thank my hon. Friend for his question. Again, it was a delight for me to visit his constituency. In fact, I visit it quite regularly on the way up to my constituency. He is quite right. I spoke to the Mayor of Tees Valley Combined Authority today. He was delighted with the £1.53 million extra that will be coming this year as part of the new BSOG allocation for Tees Valley, and he wants to work with local operators to see where it can be best used to support local bus services. On top of that, Arriva North East will be getting a funding settlement. I look forward to working with my hon. Friend and other colleagues to ensure that that cash supports not just current bus services but potential new ones in the right places.

I thank my hon. Friend for welcoming the cash that is there and ready to go in Stoke-on-Trent for bus service improvement. I would be delighted to visit him and to speak with the council. On my recent visit to Stoke-on-Trent, I visited Stoke-on-Trent Central rather than Stoke-on-Trent North, but I will remedy that at the earliest possible opportunity.

I spoke to Mayor Andy Street late last night and will have further conversations with him in the near future. I will raise that issue with him to see if we can make more progress in that area.

One of the most interesting elements of the £2 fare is that it is for long bus routes too. Some of the cross-border routes from Dudley out into Staffordshire will benefit from it. It is not within region. One of the most important aspects of what we are trying to deliver is that it is for people who are travelling a distance right across the country.

Again, I was delighted to visit Peterborough during the recent local election campaign, and I congratulate my hon. Friend on his local successes. Today, we are providing Cambridgeshire and Peterborough Combined Authority with an extra £2.3 million to support local bus services, on top of the support that will go to operators. I was delighted to meet council leader Wayne Fitzgerald recently in Parliament at my hon. Friend’s invitation. I look forward to working with him and my hon. Friend as we try to get the local combined authority to wake up to how important Peterborough is, as my hon. Friend never fails to mention.

I thank my hon. Friend for his point. I want to see people travelling not just from Accrington to Manchester but to Ramsbottom and Rossendale and out to Hyndburn and Burnley with the £2 bus fare. It is about driving connectivity, particularly for those on lower incomes, right across our country. I thank him for welcoming the scheme and I look forward to seeing him on the X43 soon.

I have huge sympathy for my hon. Friend’s comments about 16 to 18-year-olds. It was a decision made by the last Labour Government, when they increased the school leaving age, not to also increase the age of free bus travel. Sadly, that is a matter for the Department for Education. I encourage him to take it up with that Department, and I would be delighted to support him in doing so. Devon County Council will receive an extra £1.7 million outside the latest allocation, on top of the £14 million it has already had. I hope that it uses that extra money in the way my hon. Friend suggested: to bring together local services. Finally, I congratulate him on getting married at the weekend.

It is true that I get around. It was great to visit my hon. Friend, too. The local authorities in Hampshire are getting £3.6 million for local bus services. I hope that that money, plus the money that we are giving to the bus operators, will bring them together through the enhanced partnership model that the Government are pursuing, to look at how they can better serve his constituencies. He is a real champion of transport in his area. I have visited not only the buses on his patch but the very noisy motorway. I hope to see progress on that before too long.