Bus Franchising

Thursday 12th September 2024 Lords Chamber

Statement

The following Statement was made in the House of Commons on Monday 9 September.

“Today marks the first stop on this Government’s journey to deliver better buses. Day in, day out, buses shoulder the needs of millions of working people across the country, whether they are getting to work or school, or seeing the doctor or friends. A reliable bus service is the difference between aspiration and isolation, between getting on and being forced to give up—a lifeline, plain and simple. But over the past four decades of deregulation, that lifeline has been on life support. Communities have suffered cuts to thousands of services, with 1.5 billion fewer journeys taking place in 2019 than in 1985, when deregulation began. Since 2010, a staggering 300 million fewer miles have been driven by buses per year. That is the legacy the previous Government left behind: a shocking decline in this country’s bus services, which has done untold harm to communities across the country.

Behind those stats lie human stories—of the poorest groups, who catch 10 times as many buses as trains, regularly let down; of people denied access to work or education, because they cannot depend on the journey there; or women and girls denied access to a safe journey home. They represent a steady cycle of decline that reverberates beyond buses to our economy as a whole, and of public services not working for working people.

Enough is enough. This mission-focused Government were elected to repair what is broken, and to reform what does not work. We are clear about the fact that better buses are essential to a better Britain, and that buses are a route not just to connection but to economic growth, cleaner air and a fairer chance in life for everyone. That is why my right honourable friend the Transport Secretary has made fixing this country’s broken bus network one of her top priorities in her department and it is why, just two months into office, we are kick-starting a bus revolution that will put services back into the hands of local leaders, achieving in just 10 weeks what the last Government failed to achieve in more than 14 years.

The statutory instrument that we laid this morning opens up bus franchising for all local transport authorities in England. It gives local leaders more flexibility to adopt a model that works for their areas and, because we are streamlining the current two-step process, authorities will now only need to obtain the Transport Secretary’s consent before preparing a franchise scheme. This is a transformative change, one that will give every community the same powers that mayoral combined authorities across the country are currently using to deliver better services, along with the power to match them to local needs. We know that the franchising model works: we need only look at the Bee Network in Greater Manchester, where buses were brought under public control just one year ago and where reliability has already improved, passenger numbers have already grown and a new 24/7 service has just been introduced; or at Greater London, where public control has meant that more bus journeys are now taken in our capital than in the rest of England combined.

We are taking aim at the current postcode lottery of bus services to ensure that our most popular form of public transport starts running in the public interest. Local authorities know best how to deliver for their communities, which is why today we are empowering them to follow in the footsteps of Greater Manchester and London, to ensure that they have buses in the right place at the right time, truly serving local needs. Our plan will help to turn the tide after decades of decline. The statutory instrument will be backed by a public consultation, which my right honourable friend the Transport Secretary also launched today. It seeks views on breaking down the barriers to franchising, and on how we can support safer and more accessible services. By delivering simpler guidance, it will support and speed up the franchising process, meaning that councils will spend less time and money filling in forms, and more time planning routes and prioritising the interests of the communities that they serve.

However, this is just the start of our journey. Today’s steps pave the way for a new bus Bill later in the current parliamentary Session—a Bill intended to reform funding, to allow franchises to be rolled out to more places more quickly and cheaply, and to support councils that choose not to franchise but still want the flexibility to deliver on local transport priorities. The Bill will also allow us to remove the ideological ban on municipal bus companies that was imposed by the last Government despite the huge success of those companies, which can be seen across the country where they are still in place—for instance, the award-winning publicly owned services in Nottingham and Reading. This, rightly, is not a one-size-fits-all approach, and, crucially, it places no additional burden on taxpayers. It simply acknowledges a truth with which many in the House will agree: that the best decisions are not always made by Whitehall, but are made in town and city halls throughout the country by those who are accountable to local communities, and by those who, day in day out, use the very services that we are talking about.

It has been said before, and I will say it again: under this new Government, the Department for Transport is moving fast and fixing things. Today’s steps place better buses at the heart of this Government’s plan for change. Four decades after buses were deregulated, and after 14 years of decline, we are now empowering communities to take back control of the services on which they depend—to get Britain moving, to get our economy growing and to get more passengers, wherever they live, back on board. I commend this Statement to the House”.

15:05

[Lord Moylan (Con)]

My Lords, I thank the Minister for the Statement. The Official Opposition share the Government’s desire for high-quality public transport and we will hold the Government to account on this.

In government, the Conservatives prioritised buses, protecting our network during the pandemic and introducing the “Get Around for £2” scheme, saving millions of people money on their commute and, most importantly, incentivising them to travel by bus again quickly after the impact that the pandemic had on travel. We know that our public transport sector desperately needs increasing passenger numbers to make routes viable and this is an especially acute problem in rural areas. The previous Government’s policy, driven by the “Get Around for £2” scheme, was successful in driving up the number of passenger journeys in the year to March 2023 by almost 20%. While this is not yet at pre-pandemic levels, our scheme is supporting the return of passengers and boosting the bus sector. So, before addressing the specific issue of bus franchising, can the Minister say what the Government’s intention is for the “Get Around for £2” scheme and whether it is also at risk of means testing? Will the Minister rule that out?

I turn now to the subject of the Statement: the statutory instrument. It seeks to give to all local authorities the powers on bus franchising that are currently exercised in major conurbations such as London and Manchester. Broadly and generally, the Official Opposition welcome the granting and devolution of more powers to local authorities, but this statutory instrument, like a number of announcements from the Government to date, is fundamentally bogus, for two reasons. First, it is often argued that cities and towns outside London should have the sorts of public transport services that London has and the sort of system that provides those transport services. As noble Lords will no doubt be aware, the bus service in London is provided by private companies that operate under concessions that have been granted to them, competitively, by Transport for London in a way that ensures a degree of coherence and system in the operation of the bus service across the conurbation.

The fares risk, which is the crucial question in all this, is borne by Transport for London. The bus companies themselves simply supply the service for a fee. The truth is that this is not something that just happened overnight. TfL did not suddenly find a way to do something that nobody else had ever done. Transport for London, in various guises, has been operating transport services in London for over 150 years, and bus services going back at least to the foundation of the General Omnibus Company—a French company, actually—in the 1850s in London. It is the historical core of what we now call London Buses. The capacity of most local authorities to deliver these services is extremely limited. They do not have those roots or those abilities. Where, out of nowhere, are they to conjure the ability to set up a bus concession management system?

The second reason that this is a fundamentally bogus statutory instrument is the cost of doing it. Running bus services, on the sort of basis that local authorities wish to provide them, is very expensive and requires large subsidies. My figures might be slightly out of date, but when the last Mayor of London, Boris Johnson, left office, the subsidy to London Buses was of the order of £450 million a year. The last I heard, and it may not be totally up to date, was that under his successor the cost of London Buses is of the order of £700 million a year. That is in a very large city, of course, but £700 million a year is a huge amount to have to find to subsidise bus services.

Throughout the country, local authorities will have to subsidise buses if they are to provide the sorts of services that this statutory instrument and this Government are holding out as being possible. Where is the money going to come from? Without massive investment in capacity and the subsidisation of operations, this statutory instrument is fundamentally meaningless.

So do the Government intend to publish a full assessment of the expected impact of this policy on the quality, frequency and accessibility of bus services? Will the Minister commit to assessing the relative impact of this policy on rural communities in particular, as opposed to urban communities?

Finally, the Official Opposition, as I say, support the desire for improved public transport and we generally support the increase of powers to local authorities. But this policy appears to put showmanship ahead of practical improvements. The Government have yet again got their priorities wrong, focusing on who runs local bus services rather than on delivering the people’s priorities, which are the quality, frequency and reliability of our public transport network.

[Baroness Randerson (LD)]

My Lords, the Liberal Democrats welcome this Statement. As it has emphasised, it is clear that buses are crucial to our economy and society. They provide services for many of the poorest groups—the young, the old, more women than men—and are crucial for access to education, jobs, health services and other aspects.

We welcome rapid action to deal with our rapidly declining bus network outside London and we are fundamentally in favour of devolution, believing that decisions made locally are generally more effective and efficient. If the Minister looks back to Hansard in 2017, he will see that I put down during debates on the Bus Services Bill amendments that did roughly what the Government’s proposed measures will do—allow all local authorities to franchise and set up their own bus services. The response from the then Minister was that it was all about issues of capacity. To be fair, that is still an issue. On its own, this will not be enough, so what are the Government going to do? Will they provide additional funding and funding changes in the Budget in order to ensure that franchising is enabled in those local authorities that are not generally as big as, for example, Manchester.

As with the rail Bill, our concern is that the key issues are not necessarily included in the Government’s proposals in order to be broad enough to solve the problems. I have a couple of associated questions. Reference has been made to government subsidies to support the £2 fare cap. That will run out in December, and another funding stream that is designed to support improved services will run out in April. Can the Minister give us a commitment that we will see the end of temporary funding and that it will be replaced with a multiyear, more encompassing set of funding that is less divided up? There are four sets of funding that go to local authorities. They need, as the bus industry needs, certainty and a long-term approach, so I hope the Government will do that.

Finally, can we have an assurance that the Government will look at badly needed incentives and assistance to encourage young people on to our buses? For years and years, we have had free fares for elderly people. Young people need a nationwide scheme of at least reduced fares in order to get them on the buses and encourage them to become the bus users of the future. Many rural areas in particular need additional bus services, and young people using the buses would be a great incentive to the establishment of new bus services in those areas.

[Lord Snape (Lab)]

My Lords, I do not normally agree with anything that the Front-Bench spokesperson says—

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

It is the turn of the Minister.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

I thank the noble Lord, Lord Moylan, and the noble Baroness, Lady Randerson, for their comments on this subject. Despite the noble Lord, Lord Moylan, having just congratulated me on my position, I find myself virtually wholly disagreeing with what he said, save only one thing, which is that the quality, frequency and reliability of bus services are very important to all those who use the most popular form of public transport.

The noble Lord raised the issue of the £2 fare cap. As the noble Baroness, Lady Randerson, observes, the money for it runs out in December. The Government are looking urgently at this to determine its future, and we will respond on it as soon as we can.

The noble Lord talked about the TfL system, which of course I am as familiar with as maybe he is, having administrated it for the best part of 15 years. He said that the fares risk is borne by TfL and questions the capacity of local authorities to deliver that. His observations about the capacity of other places in England to do this do not need to be theoretical, because the Mayor of Manchester, a combined authority, has had bus franchising in place for some time.

One of the features which distinguished it in London is being replicated in Manchester: in the last six months alone, the first tranche of franchising in Manchester has produced revenue growth of 5%. It has enabled the introduction of more buses, the service is more reliable, and a night bus service has been introduced. Those are features which occur because of the comprehensive network, its promise of stability, its consistent information, ticketing and planning, a closer interaction with traffic authorities to allow buses to progress more freely, and the introduction of real-time information. Those are all features that local authorities can deliver if they choose to go down the franchising road.

The noble Lord questions the capacity of local authorities to put in such a system. My department is building its capacity in order to give assistance on the ground to local authorities that want to proceed down this route.

On the full assessment of the impact of this policy, I have already described the interim assessment from Manchester, which is wholly good. Throughout England, in towns and cities and in the countryside, there are huge variations in the quality, volume and reliability of bus services. The Government’s suite of measures, of which the introduction of franchising is one for those local authorities that wish to take advantage of it, will stabilise things so that the quality, frequency and reliability of the bus service is more certain. That will encourage people to travel and give the bus service itself more passenger volume and revenue.

The noble Baroness, Lady Randerson, supports local devolution, and this Government strongly support that too. Franchising is a measure which will be available to all local authorities. They can choose what to do in their particular circumstances. She refers to the end of temporary funding. We certainly have a keenness to amalgamate funding streams; there are several, and it would be easier for local authorities and bus companies to understand one funding stream. We would like to give certainty on multiyear funding, but that must be subject to the parlous state of public finances that this Government have inherited. She is right that giving certainty in this direction will improve the quality, frequency and reliability of bus services in Britain.

Lastly, the noble Baroness refers to young people. Greater local authority control of bus services gives the opportunity for more local authorities to give concessions to young people, where that is justified. There are already concessions for young people, but we agree that getting young people into the habit of public transport usage is extremely important.

15:22

[Lord Snape (Lab)]

My Lords, I apologise for leaving the depot prematurely a few moments ago.

I rarely agree with anything that the main Opposition spokesperson on transport has to say, and I notice that he glossed over the fact that hundreds of bus routes and thousands of bus miles disappeared under the previous Government’s policies. However, he does have a point as far as the financing of franchising is concerned. Does my noble friend accept from me, the former chairman of a major bus operator, that franchising outside our major cities in particular will be an expensive business, and that if franchising is to succeed, as most of us on these Benches would hope, it must be properly funded? What discussions have been held between his department and His Majesty’s Treasury to ensure that proper funding is in place?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for his contribution. I should have said in my previous remarks that this is all preliminary to a buses Bill, which will be introduced to the House in due course and cover a wider range of subjects.

This is offering a choice to local authorities. It gives them the opportunity of franchising, if they believe that it is the right thing to do. Of course, all funding is being considered in the round as part of the spending review. I cannot share details about the discussions with His Majesty’s Treasury at this stage, but, in the meantime, the department is building its capacity to provide tangible, on-the-ground support to local transport authorities that wish to take back public control of bus services. We are also working with all stakeholders to determine how the buses Bill will make franchising easier and cheaper to deliver and further reduce the barriers to its introduction.

[Lord Berkeley (Lab)]

My Lords, I very much welcome my noble friend’s Statement, because it is about time that buses fulfilled their role of providing local transport for so many people. I worry about where they will get the money from and how many people will use them, if they use them to start with. As the noble Baroness said, it is important to get young people into the idea of using buses. How young is young? They need to be school kids right up to people starting their first job, who may well be in their 20s. If they live a long way from an established bus route, they will not get a job.

It is quite clear from what my noble friend said that all local authorities will be invited to do this and to participate one way or another, be it concession or franchise. But what happens if they do not want to do it? How will the Government encourage them? It is important to enable everyone who needs it to access public transport.

I have one example that I ask my noble friend to look into, although he may not be able to answer today. For those who live in the Isles of Scilly who want to go between the islands, the average fare in the winter is somewhere between £10 and £100—to get to the doctor, to the chemist or to work. It seems to me that what is good for city centres and the countryside in England could also be useful to people who live on islands. It might apply to the Isle of Wight as well, I do not know. I look forward to my noble friend’s comments.

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for his contributions. What would happen if local authorities did not want to pursue this course? The existing and partnership arrangements for bus operations, which have been in place locally for some time, would continue. It is a fair observation that there is a huge variation in standards of bus provision across Britain. If local authorities do not wish to participate or to pursue franchising, they can continue to pursue the arrangements that they currently have with their bus operators.

I cannot, of course, comment on the costs of transport between the islands of the Isles of Scilly or the minimal bus service on St Mary’s. However, as my noble friend knows, the provision in Cornwall, which is a largely rural county, is very good. That is an example of an arrangement that has been tailored to a rural area. None of these new arrangements would prevent existing arrangements from continuing.

[The Lord Bishop of Manchester]

My Lords, I declare an interest: I got the bus on Monday, Tuesday, Wednesday and today, and shall be getting it tomorrow. As I live in Greater Manchester, I have been a real beneficiary of what the previous Government allowed for franchising in my city and its surrounds. The buses have become more reliable: I can now go to a bus stop and expect a bus to turn up within 10 minutes, not 40 minutes, which I sometimes had to wait for before.

I have two questions. First, I am old enough to remember when local authorities in Greater Manchester often had joint boards. The wonderfully named Stalybridge, Hyde, Mossley and Dukinfield joint board provided buses in parts of what is now Tameside.

[Lord Snape (Lab)]

Green buses.

[The Lord Bishop of Manchester]

They were indeed green. I remember them very well. I wonder what the possibilities are for rural areas that are not part of a combined authority like Greater Manchester. Will local authorities have the capacity to combine together to franchise bus services jointly, rather than doing it by themselves?

Secondly, we made great progress in Greater Manchester; we got the buses and the fantastic Metrolink tram system. It would help to integrate the whole thing if we gained control of local rail services at the same time. For many people, local rail, as well as buses and trams, is necessary to make journeys. Could the Minister give any indications of plans to allow the franchisement of local rail services in places such as Greater Manchester?

[Lord Hendy of Richmond Hill (Lab)]

I thank the right reverend Prelate for his comments. I particularly note his support for the effects of the initial tranches of franchising in Manchester, which have indeed increased service and produced better reliability. He refers to the very old organisation of public transport in Manchester. Many of those magnificent vehicles are in the Manchester transport museum at Queens Road.

These days, the increasing number of combined authorities are of a good size to take advantage of this Government’s franchising proposition. It is, in effect, bringing together local authorities of sufficient size to be able to take advantage of the benefits of a network. I do not have an answer to whether this will allow individual local authorities to join together, but I am happy to write to the right reverend Prelate about that.

The right reverent Prelate raised the subject of the integration of rail services. We have already made a lot of progress with the Mayor of Greater Manchester, and with the Mayor of the West Midlands, in integrating rail services into the local transport network in information and in ticketing. Although this is not the subject of today’s discussion, I have no doubt that there will be some announcements on that. He is right to aspire to an integrated local network that is modally agnostic and includes rail and, in Manchester’s case, metro and buses.

[Lord Hampton (CB)]

My Lords, if we are going to use TfL and the London bus network as the example for going around the country, the dread problem of safety goes around again. Carrying on from the question I asked the Minister earlier this week, it often seems that in London—where, from memory, someone is killed by a bus every six weeks—the bus companies investigate their own incidents, with the DVSA checking for legalities. Who will be responsibility for safety in these franchises, and will they have teeth?

[Lord Hendy of Richmond Hill (Lab)]

One of the benefits of London’s large system of bus franchising is the work that Transport for London has done on the design and safety of bus travel. The noble Lord has to remember that those vehicles are on the road for 18, 20 or 24 hours a day, and they form a major part of the mileage of vehicles in London, even though their numbers are fairly small.

A significant amount of work has been done on the safety of driving and drivers, and on the design of vehicles. I know that has been shared with manufacturers and bus operators across the country, and with organisations such as Transport for Greater Manchester and the Urban Transport Group. I would expect more of that to happen.

The safety of buses is considered by the Driver and Vehicle Standards Authority, which is an executive arm of the Department for Transport and has the power to investigate serious bus accidents, which it does. It has the power to prosecute the drivers and operators of those vehicles. None of these proposals would alter its powers to continue to do so.