Bus Services (No. 2) Bill [HL]

Lord Hendy of Richmond Hill Excerpts

2nd reading
Wednesday 8th January 2025 Lords Chamber

Moved by

[Lord Hendy of Richmond Hill]

That the Bill be now read a second time.

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

My Lords, before I come to the Bill, I will pay my respects to Baroness Randerson. Since being appointed to your Lordships’ House, Baroness Randerson served as a Government Minister and spent almost 10 years as her party’s transport spokesperson. During this time, she showed a mastery of the transport brief, making important contributions to wide-ranging debates and holding successive Governments to account.

After becoming a Minister in July, I enjoyed exchanging views over the Dispatch Box and in private with Baroness Randerson. I was very grateful to work closely with her on the recent Passenger Railway Services (Public Ownership) Bill—now Act—the first Bill I have taken through as a Government Minister, and she showed her characteristic attention to detail, inquisitiveness and determination to ensure that the legislation left this House in the best shape possible. I know she was enthusiastic about the Bill in front of your Lordships’ House today and would have wanted again to make sure that it left this House in excellent shape. On that, I will do my best.

As your Lordships will be aware, Baroness Randerson had a distinguished career prior to her introduction to the Lords, serving in the Welsh Assembly, now the Senedd, as the Member for Cardiff Central for 12 years and holding a ministerial post in the Welsh Government. I am honoured to have had the opportunity to work with her, and I know that her commitment to public service will be long remembered. I send my condolences to her family, friends and colleagues in this House.

Moving to the Bill, I am pleased to present the Bus Services (No.2) Bill for Second Reading today. It is not to be confused with the Bus Services Bill, which was introduced as a Private Member’s Bill in the other place. I declare my interest as a licensed PCV driver and that the charity of which my wife and I are trustees holds a number of community bus service permits used for the Imberbus service, which raises money for charitable purposes.

Buses are the most popular mode of public transport and are essential for growth, jobs and housing. However, we have seen in England that passenger numbers and bus service levels have been in decline, with 1.8 billion fewer annual bus journeys outside London in 2023-24 compared with 1985-86. The Transport Act 1985 radically changed the bus industry by privatising the National Bus Company companies and deregulating services outside London, restricting the powers of local leaders to decide what is best for their local area. This Government intend to reverse this.

In London, passengers have long benefited from public control of the bus network, with lower fares and frequent and reliable services. The 1.8 billion passenger journeys made in London in the year ending March 2024 demonstrate how critical the network is to London. This figure accounts for over half of all bus journeys in England. Outside London, two of the existing local authority bus companies, in Nottingham and Reading, are ranked second and third for the highest number of bus journeys per head in England. The success of London, Nottingham and Reading is not a coincidence. Passengers will use good services. It is therefore only right that these options are available to all local transport authorities.

As a Government we are committed to delivering better buses. In the 2024 manifesto the Government set out a clear plan to improve bus networks. This Bill marks an important contribution to supporting the Government’s missions to kick-start economic growth and break down the barriers to opportunity. Changes that the Bill makes will enable safer, more reliable, inclusive and accessible networks that provide the connections that passengers need. This, as I said, is essential to accessing vital jobs, education and healthcare in cities, towns and rural areas across England.

The Bill is about providing local leaders the ability to choose the best way of running services in their area, a choice not currently available everywhere in England. Local authorities should be able to decide how best to run their services, choosing the right operating model that works for their communities. This will help improve bus services and grow usage, meaning that it will be passengers who benefit. The Bill is focused and narrow in scope. Its measures apply primarily to local bus services in England. School services are also in scope due to the single clause relating to enhanced criminal record checks for drivers of school services.

We have already taken a first step in reforming bus services. We brought forward the Franchising Schemes (Franchising Authorities) (England) Regulations 2024. These came into force on 18 December and enable all local transport authorities in England to franchise their bus services. These powers had previously been limited to mayoral combined authorities and mayoral county combined authorities. The Bill builds on these regulations and marks the next step in our ambitious plan towards a better bus network. The need for reform is clear—to reverse the decline in passenger numbers and services that have been depleted over many years, and particularly recently.

Transport for Greater Manchester’s journey to bus franchising has shown the potential benefits of greater public control. It is timely to be presenting the Bill during the week in which its journey has been completed. Manchester has already seen patronage increase by 5% since public control began to be rolled out in 2023. Elsewhere, local authority bus companies such as Nottingham City Transport have delivered award-winning services to passengers. There are also great examples of local transport authorities working in partnership with the private sector to deliver excellent services, such as in Brighton, Norfolk, Bournemouth and Poole, and Wiltshire. Sadly, there are also examples of towns and cities with little or no evening or Sunday services, and rural areas with no services at all. There will be no one-size-fits-all approach. Different cities, towns and rural areas have different needs. The Bill is about ensuring that local areas have all the tools they need to improve bus services for their communities.

Bus services are the lifeblood of communities. They carry people to hospital appointments, to school and to their jobs. This is especially true for women, those who are young, those on low incomes, ethnic minorities and the elderly, all of whom rely on buses more. Given the strong case for change, the principles behind the Bill should, I hope, receive cross-party support. The manifestos of all three main political parties acknowledged the importance of buses. There is also strong public support, so I sincerely hope that noble Lords on all sides of the House can get behind the Bill as a vital step towards fixing our fragmented and variable bus networks.

I know from speaking to many noble Lords that they believe in improving the bus network for the better, whether that is improving accessibility or rural services, or protecting routes. The Bill seeks to address all these issues and keep passengers at the core of its aims. It is a government priority. The ambition is clear, and it is hoped that the Bill will deliver greater consistency in bus services across the country. Its objectives include protecting passengers from anti-social behaviour and violence, reducing fare evasion and expanding powers to local authorities on bus funding.

I am sure that some noble Lords will question how the Bill moves forward from the last fundamental shift in bus legislation. It is true that the Bus Services Act 2017 gave new powers to local transport authorities to create enhanced partnerships and allowed mayoral combined and mayoral combined county authorities to pursue bus franchising, but these franchising powers did not extend more widely. New local authority-owned bus companies, formerly referred to as municipal companies, were also banned by that Act.

This Bill builds on the 2017 reforms, while also reversing the ban on local authority-owned bus companies. This will help deliver a wider set of options for local areas. Local transport authorities—LTAs—know the needs of their communities and they are best placed to decide what shape their bus services should take.

I will briefly enumerate what the Bill does. It is split into 11 areas. First, while the recent franchising regulations removed the limit on which local authorities could franchise, the clauses on franchising in the Bill will streamline the process, including by removing the Secretary of State consent requirement. The intention is to introduce flexibility and to reduce the amount of time it takes for LTAs to franchise their bus services if they choose to do so.

Secondly, a provision in the Bill will require LTAs to specify requirements which must be followed where bus operators under enhanced partnerships wish to vary or cancel a service that has been identified as a socially necessary local service.

Thirdly, for local areas where enhanced partnerships remain the best option for local services, the Bill will strengthen these partnerships, allowing for improved working between LTAs and bus operators.

Fourthly, the Bill will repeal the ban on establishing new local authority bus companies, giving local authorities the chance to use their local knowledge to run services in their area and opening up powers currently limited to the five legacy local authority bus companies.

Fifthly, LTAs will be given the power to design and make grants to operators of bus services in their areas. They will have greater freedoms to decide where that money is directed.

Sixthly, provisions on bus registration will improve the availability of information for passengers. This includes new statutory powers to require LTAs in franchised areas to provide information about local bus services with the aim of helping to improve reliability for passengers.

Seventhly, the Bill includes measures to improve safety on buses by giving powers for LTAs to bring forward by-laws to tackle anti-social behaviour and powers to enforce fare requirements.

Eighthly, it is important to increase the safety and accessibility of stopping places, so there is a measure giving the Secretary of State the ability to set out expectations for bus stops and bus stations in statutory guidance.

Ninthly, the Bill closes an existing loophole through the inclusion of a safeguard for school services. This requires the operator of a public service vehicle to check an enhanced criminal record certificate for drivers who carry out closed school transport services more than three times in any 30-day period.

Penultimately, there is a power in the Bill to mandate training of bus staff, including bus drivers, on tackling crime. This is intended to tackle incidences of violence against women and girls, as well as anti-social behaviour. There is also a measure for training on disability awareness and assistance.

Finally, to meet the commitment to move towards sustainable travel, there is a measure on zero-emission buses to accelerate their rollout by introducing a restriction on the use of new non-zero-emission buses on registered local bus services. But, in recognition that the industry will need time to adjust to this change, this will not come into force before 1 January 2030.

This is a comprehensive and focused Bill that reforms and develops critical aspects of bus services. Stakeholders, including the bus industry, have been engaged throughout policy development to ensure that the provisions are fit for purpose and address the key challenges that the industry faces.

The Bill’s application is largely to England only. This is the case for the critical measures relating to bus operating models, such as franchising. Certain clauses will also apply to Wales and/or Scotland where necessary, but the Bill as drafted will not require any legislative consent motions from the Welsh Senedd or Scottish Parliament.

Before I conclude my opening remarks, I reinforce that reform does not end with this Bill. This journey has many stops. Following Royal Assent there will be further regulations required, including on franchising, bus registration, fare evasion, staff training and zero-emission buses. These are needed so that that which the Bill has enabled can be set out clearly for industry stakeholders and local authorities to follow. My department will continue to engage with all parties.

I recognise that franchising is a choice, but that this route is not currently well trodden. My department is therefore developing guidance to increase capability and capacity in those authorities that are striving to franchise, and this guidance will follow the Bill.

While the Bill does not introduce new funding, I am sure that noble Lords will wish to debate funding through the parliamentary process. It would be remiss not to mention the Government’s Budget commitment to over £1 billion of funding for buses in 2025-26 to support and improve services and keep fares affordable.

To conclude, this Government will reform the bus network to deliver improved services for passengers across England. This supports our growth and opportunity missions, providing a clear strategic direction for buses and proper integration and co-ordination. The Bill presents an unprecedented opportunity, learning from the 2017 Act, to create a safer, more reliable and transparent bus network, with local leaders having more powers to decide what is best for the local area that they represent. This will be a step forward in reversing the decades of decline that have become synonymous with bus travel in this country. There is much to be done and this will not be an easy journey, but industry stakeholders and local authorities alike are invested in creating an improved bus network that users can be proud of. This Bill is a vital component in our plan to reform buses. I beg to move.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank those who have engaged in today’s lively debate on the Bill. I have listened carefully and with much interest to the excellent points being raised across your Lordships’ House. I will attempt to respond to some but not half as many questions and concerns as I would like to because of the time. We also have Committee, in which we can explore many of these issues in greater detail. In the meantime, I will follow up where I can as soon as I can on some of the issues that I cannot mention now.

I thank the noble Earl, Lord Effingham, for his introduction, much of which was covered by what the noble Lord, Lord Moylan, has just said, but I will say one or two things to him in passing. First, on the notion that bus fares increased by 50% from £2 to £3, it is of course a calculation that bus fares of £2 increased to £3, but many passengers do not travel on individual tickets. Also, as the industry trade body said, for the 26% of passengers who travel on individual tickets many fares for shorter journeys remain below £3. The cost of franchising in Manchester is not £1 billion; it actually cost, on a one-off basis, £135 million, much of that paid for by Greater Manchester itself. One of the reasons why it cost so much money is because it took six years, as the process was so convoluted. A clear aim of this Bill is to make franchising easier.

Also, as a point of issue, it is not only electric buses that get recalled by manufacturers. As a bus operator, I can tell your Lordships of many circumstances in which buses have rightly been recalled for safety reasons. I think it is inevitable that zero-emission buses will take over in future, and the Bill seeks to ensure that the industry recognises that. However, he is right in referring to a one-team ethos; I am not entirely sure that that sentiment was reflected in what the noble Lord, Lord Moylan, just said, but we will do our best to get a good Bill out of this, I am sure, and I welcome that sentiment.

I thank the noble Baroness, Lady Pidgeon, for her really helpful remarks. The devolution of funding and the statutory guidance given by the Secretary of State, under new Section 154A, we will debate in Committee. It is not the intention to apparently devolve funding and then put on such rules that in fact it is not really devolved. The intention of the Bill is to allow a much greater level of freedom for local transport authorities than they have had. It is also the intention of the Government in due course to streamline the funding streams above that. I recognise that point completely. Frankly, I am as confused as some noble Lords about how many streams there are. The noble Baroness mentioned some of them, and that would be better, but actually the result of this Bill is that to make it much easier at the point at which the money is distributed, which must be the right thing.

I recognise the points about young people’s fares. There are already local transport authorities that give concessions to young people, and nothing in this Bill will prevent that. The wider point, which we will come to again and again with this Bill, is that this is designed to give local transport authorities more freedom. A number of noble Lords have referred to that this afternoon and this evening. It is the right thing to do because buses are a local service, not a national service. I will come back to the specific remarks of the noble Lord, Lord Moylan, at the end, but the clear intention of this Bill is to allow local transport authorities to decide what methodology of providing a service is best for them and then to do it.

I was much heartened by hearing that the noble Lord, Lord Burns, a former Permanent Secretary at the Treasury, welcomed multiyear funding. I will reflect with my colleagues in government on what his experience is of that. We have to wait for the Spring Statement to know what this Government are able to do in the straitened financial circumstances that they find themselves.

The noble Lord and other noble Lords have referred to open data, and I can certainly commit to the fact that open data is the intention of this Bill and of the Government. The intention of open data, reflecting the recent point by the noble Lord, Lord Moylan, is that it should be free. That is the right thing to do. If you want public transport usage to increase, the data should be available. I have a rather good story to tell the House about open data. At Transport for London, we searched for the person who developed the best open data app for the Underground. I said that I would like to see that person. It turned out that they worked for a bank in Melbourne, and it was not immediately possible for them to turn up in my office. However, it is a really important point.

The noble Lords, Lord Whitty and Lord Hampton, and others, referred to integrated ticketing. I will write to them about that. It is obviously the intention to have integrated ticketing. One of the attractions of franchising is that it enables that to happen. One of the weaknesses of commercial bus provision outside London is the degree to which individual operators would rather offer that technology but only on their own buses, whereas the public and passengers want it to be available on every bus. I know that my noble friend Lady Blake has some experience of that from Leeds and West Yorkshire. It is obviously desirable for passengers, particularly in urban areas, to be able to use any bus and for the ticketing system to be consistent.

A number of noble Lords referred to training. There is already mandatory training for bus drivers. The intention of this Bill is to specify further mandatory training but to deliver it within that regime, which I think is absolutely right. A number of noble Lords referred also to the roads on which buses operate. It is quite right that the reliability and indeed the economics of bus operation are vastly altered by the existence of congestion and the ability of buses to get through traffic, whether through bus lanes or other things. One of the most notable things about the Manchester franchising is that a consequence of putting some of the bus service into the control of the Mayor of Greater Manchester, then to be reflected in the local transport authority, was that a vastly increased focus was immediately available on, for example, getting rid of temporary traffic lights and straightening out traffic management. There have been references this afternoon and this evening to what help can be given to local transport authorities that wish to engage in franchising. The Bus Centre of Excellence has been mentioned. It does not need full-time employees but for advice to be available when needed. One of the features of that is to give advice on traffic management so that buses can take their appropriate place in transporting passengers in local areas.

It is always a delight to hear from the noble Lord, Lord McLoughlin. He has made some excellent decisions in his time, including appointing me as the chair of Network Rail, though my wife was not similarly impressed by that appointment. Many of the points that he raised are obviously germane, in particular on the very sharp decline in passenger numbers in the north of England. He said that one size does not fit all, and he is absolutely right—I think that is much more to his point. This Bill enables local transport authorities in cities, towns and rural areas to choose the best way of going forward. It is not necessarily franchising. Even if it is franchising, it is not necessarily on whole routes. Some of it is about franchising in particular areas where a franchise mechanism might produce better public services. The Government do not want to dictate whether you should have a franchise; they want local transport authorities to use the best mechanisms that they can.

It was a delight to hear from the noble Baroness, Lady Bennett, and even better to hear that the noble Baroness, Lady Jones, is recovering. I look forward to seeing her in her place. The noble Baroness, Lady Bennett, raised a number of questions that will have to be answered either in Committee or in correspondence. She referred particularly to recovering lost routes. One of the real sadnesses of the last several years is that some bus funding has been available to start new bus routes when the old ones ceased, because they were not able to be funded through that arrangement. But it is better if routes are not stopped and then started again because, in the course of that, you can lose a lot of patronage.

The noble Baroness mentioned South Yorkshire. I can tell her that the South Yorkshire Mayoral Combined Authority has completed a franchising assessment, and the consultation on its scheme closes on 15 January.

I listened very carefully to the noble Baroness, Lady Harris of Richmond. I had an exchange with her previously about the circumstances in North Yorkshire that she raised, and her concerns are known to the Government. I am also aware of a petition tabled to Parliament from a Member for the area in the other place, and my colleagues in the Department for Education will respond to that shortly. I note, out of interest, that North Yorkshire is a Conservative council.

The noble Lord, Lord Snape, referred to matters including the cost of zero-emission buses. One of the reasons for the Bill proposing both an effective ban on non-zero emission vehicles and the date of 2030 is that, as he knows as an experienced bus person, the cost of zero-emission and hybrid vehicles has gone down. The intention is to support sales, which this and the previous Government have strongly supported through funding to bring down the cost of those vehicles, such that they will be available and economical to run when that time comes.

A lot of points were raised by the noble Baroness, Lady Pinnock, about bus services, many of which were germane. I have no doubt that we will discuss them in Committee. She asked whether I agree that, as local transport authorities have or will get more responsibility, more councillors should be involved. I am not sure that it is my job to decide that but, as has been mentioned before, help might be needed with some of these arrangements. I know—actually, it is quite well known—that the quality of passenger transport in local transport authorities depends on their having expertise. On that matter, I agree with the noble Lord, Lord Moylan. One of the purposes of the Bill is to set out the choices, and the department is putting money and resource aside to help people make the right choices and institute them successfully.

The noble Lord, Lord Hampton, raised several issues about safety. I will consider the points that he and others have raised about whether safety data should be collected. I will certainly write to the noble Lord and I have no doubt that those matters will be raised in Committee.

I do not drive passenger service vehicles in service very often now, but my technique in keeping time was always secondary to road safety. My belief is that that is still widely true in the bus industry, if only because of financial reasons, because bus operators, and for that matter local transport authorities that choose to operate buses, will always be subject to the costs of insurance. We will have a further look at driver welfare and will no doubt discuss it. The noble Lord also raised data sharing, to which I have already referred.

It was extraordinarily kind of the noble Lord, Lord Holmes, to refer to London 2012, which now seems quite a long time ago.

[Lord Moylan (Con)]

It was a long time ago.

[Lord Hendy of Richmond Hill (Lab)]

It was a long time ago; the noble Lord, Lord Moylan, and I completely agree. I wanted only to say that I do not claim particular credit for it; if you lead a team, you should give credit to the team that you lead and not take it all yourself.

The noble Lord’s more important points were about inclusion and accessibility. I absolutely recognise the points he made about the accessibility of the bus service to people with disabilities. I note his contention that Clause 22 does not go far enough, but I promise—and I am sure we will discuss it in Committee—to look at the degree and extent to which this clause can answer his points. He must be able to see that the intention of Clause 22 is to improve bus stopping areas and for the Secretary of State to give some guidance, which ought to be mandatorily taken into regard by local transport and highway authorities.

The noble Lord, Lord Berkeley, raised points about community control and who is in control. As I said, the point of this is to return control to local transport authorities. He also raised a question, which he largely answered, about what happens if local transport authorities do not do their job. One would hope that the citizens of the local transport authority would vote them out for not doing their job. That is the remedy. I do not think that the Secretary of State coming down on local transport authorities like a ton of bricks is a satisfactory alternative; we want to return control to the people who should rightly have it.

Incidentally, there have been bus routes down the Embankment since the trains went. I used to travel on route 109, but it does not go there any more.

The noble Baroness, Lady Brinton, also raised some important points on the Bill. She raised Clause 9 on approved persons, which we will discuss in Committee. The intention is not to deregulate approved persons but to widen the range of them. I completely agree with her that they should have some qualifications. An unqualified person should not be able to make a judgment about whether a franchising scheme is right.

The noble Baroness asked whether Clause 11 complies with the procurement regulations. I am advised that I am able to tell her that it does.

The noble Baroness welcomed Clause 19 and referred to assistance data. I will take that away and see what can be done. Bringing data on bus service usage into the 21st century is quite important and I am sympathetic to the idea that, as long as it is not a burden to bus operators, or indeed local transport authorities, collecting data is the right thing to do, so that we know what is going on.

I note very clearly the noble Baroness’s comments on Clauses 24 and 25, that diversity training is not the same as the rights for disabled people, and on what we did, with her great assistance, in the Passenger Railway Services (Public Ownership) Bill, referring to the Equality Act. I will go away and reflect on that.

Lastly, I come to the noble Lord, Lord Moylan, who has some extraordinary views about socialist paradises and returning to the era of the Attlee Government. I find it particularly extraordinary because I know that the noble Lord has such a strong view about the autonomy of local authorities. The Bill intends to return bus services to the autonomy of local authorities and for the Secretary of State not to intervene so much in the provision of services.

I have to tell the noble Lord that there is currently a huge disparity in the provision of bus services across Britain. I was not only responsible for the bus service in London, as he knows, but, for a measurable length of time, I was responsible for the bus services in what was laughingly called south-east England but apparently included Norfolk, Northampton, Leicester and Southampton. Even within one bus group, 20 years ago, there was an extraordinary variation in the provision of services and the extent to which bus operators sought to maximise the network and the return on it, or cut off individual journeys, to the extent to which some towns and cities in Britain find themselves short of or even without bus services after 7 pm and on Sundays.

I think I know roughly how to run a bus network, and one of the things you should do, which is the feature of the best bus services run by the private companies outside London—I can mention some places, but I will not—is to seek to service the network and to take people to school, hospital, work, leisure and home. It is in those places where those services have drifted away that something else needs to be done.

That is also true of rural services. The noble Lord alleged, quite wrongly, that the Bill does not deal with demand-responsive transport. It very much does—that is one of the remedies open to local transport authorities, as it should be. It is not a particularly cheap methodology but it is there to be used and, in fact, there are some startlingly good examples of it. He refers to it as though it is an urban feature but his own Government instituted an experimental regime in Cornwall, which, as the noble Lord, Lord Berkeley, knows, has produced rather a good bus service in Cornwall by having features of Cornwall Council’s activities that amount to franchising in the same way that the Bill will allow to happen.

I have come to the end of my allotted time. There is a limit to what I can answer here. As I set out earlier, the Bill is primarily about empowering local leaders wherever they are. It is a privilege to bring this forward to your Lordships’ House for Second Reading. I thank all noble Lords who have participated in today’s debate. I welcome the support of those who have spoken in favour of the Bill’s measures and look forward to continuing the debate on the Bill in Grand Committee.

Bill read a second time.

Moved by

[Lord Hendy of Richmond Hill]

That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order: Clauses 1 to 10, Schedule, Clauses 11 to 31, Title.

Motion agreed.