Bus Funding

Lord Snape Excerpts

Wednesday 17th May 2023 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I thank the Minister for her Statement. She puts on a brave face, but it is a very sad picture on buses. Anyone who was out campaigning in the recent local elections will know that the poor state of bus services was at the top of people’s complaints about local things. When you explain to people that local authorities actually have little power over the buses in their area—of course, this should be put right—they are surprised by that lack of influence, but it does not stop them being worried about this.

I am pleased to see that the Government are looking beyond the end of the next month, at a longer-term funding plan. I am pleased to see that amounts of money are specified here, so we will be able to hold the Government accountable on how, where and how effectively this money is spent. But it is a lot less than we hoped— I remember the sentence in Bus Back Better about the aim that you would not need a bus timetable.

I have some specific questions about this, because it is important that it is used as well as possible. How much of the money specified in this announcement will be targeted at the rollout of zero-emission vehicles? The figures I looked at recently showed that, although there had been some progress in developing a zero-emission fleet, it was very variable from one part of the country to another and it was still a tiny fraction of the total fleet.

Also, I am pleased to see that the money in the new funding will be focused on communities that did not previously benefit from BSIP allocations. One of the criticisms we made was that those areas with the most vestigial—if I can put it that way—and smallest bus services were not in a position to apply for the funding, so the funding went to areas with better bus services. I would be grateful if the Minister could explain how the Government will ensure that the funding goes to those most disadvantaged communities. I use the word “disadvantaged” in relation to bus services.

I am very pleased to see that local authorities will be consulted as well as bus operators. The previous criticism I mentioned was that the new funding was going to be impossible to access for areas with very little in the way of bus services. If the Government are to spread it out more fairly, what will they do to enable those areas that no longer have the expertise in their local authorities to make the applications?

The Statement goes on to the issue of the £2 bus fare cap, which is good news. However, one of the problems with it is that, although one welcomes the take-up, it was very uneven from one area to another—some bus companies did not bother to take it up as an offer. What are the Government doing to learn from their experience so far? The Government are obviously keen to develop and use this further—that is laudable—but what are they doing to ensure that there is wider adoption, with more bus companies using it and more local authorities adopting it?

What analysis have the Government made about the people using the buses in the areas where the £2 bus fare was applied? There is anecdotal evidence about the numbers of people using it who were already using the buses anyway and are now getting cheaper fares. That is great for them, but one of the Government’s aims was to attract more people on to the buses. It would be useful to learn whether the Government have done any analysis to see what type of passenger this approach is attracting.

Finally, the beginning of the Statement says that the Government will come back to the issue of concessionary fares. There is no deep analysis in the Statement of how they will get more older people back on to the buses. They clearly left during the pandemic and have not returned in sufficient numbers. Personally, I find it very worrying that they are still not getting out and about.

[Lord Snape (Lab)]

My Lords—

[Baroness Vere of Norbiton (Con)]

Perhaps I might first respond to the noble Baronesses. I am sure that the noble Lord is desperate to come in; I await his question with interest.

I could have stood before your Lordships’ House today with the moon on a stick and the noble Baroness opposite would still not have been happy. The noble Baronesses have been calling for a long-term bus funding plan, and this is it. It is not in any way a cut to funding; you cannot cut emergency funding. That was emergency funding and then recovery funding; this is something different. This is more money than buses have had for a generation. It is never going to be enough—£500 million for buses is fantastic news, yet the noble Baroness could not bring herself to be even the slightest bit happy about what it will do for our bus services.

I have heard rumours of what Labour is going to do about powers for local transport authorities, but I do not really understand it, because local transport authorities already have the power to put bus services in place. I am sure that the noble Baroness knows that. Perhaps when these plans come out, they will be pretty much what we have now.

I need to explain the situation to the noble Baroness. There is £300 million in total—£160 million plus £140 million, so roughly half and half. Half will go to local transport authorities, and they will be able to decide which services to tender. They have the power; they have always had the power. Remember, a bus operator has to tell the local transport authority in a confidential period of 28 days before it notifies the traffic commissioners that it intends to take a route away. At that point, the local transport authority can put it out to tender. We have literally given them the money to do that, but the noble Baroness cannot welcome that.

I do not understand what the Labour Party is going to do or what more powers local transport authorities could possibly have, unless Labour wants to renationalise all the buses as well. Perhaps that is where the noble Baroness thinks things will end up. I look forward to hearing from the Labour Front Bench what its plans are because, at the moment, it is completely unclear. That goes to her comments about unfettered powers that bus operators have to slash routes. That is just not true. As I said, local transport authorities can tender them. If the worst comes to the worst and their enhanced partnership does not work—as the noble Baroness knows, they can get into an enhanced partnership, working with the operators and the local transport authority; there is lots of power in that relationship between the two, to flesh out what the network should look like—they can franchise, as in Manchester. It is up to them. They have the powers to do so. But again, apparently all the power sits with the bus operators. I think they would probably say that it does not.

I note what the noble Baroness says about public ownership of some of the bus companies, and the ones that are left are very good. I think Reading is very good and Brighton is very good, but of course there have been plenty that fell by the wayside because they were not very good. There has already been a massive weeding out of the wheat from the chaff when it comes to publicly owned bus operators, so I do not think that is the silver bullet either.

I turn to the comments made by the noble Baroness, Lady Randerson, who sounded a little bit more chipper about the funding—but, again, not wholly. If I am able to answer some of her questions, perhaps she will feel a bit more positive. The money that is going to the local transport authorities will be for places that missed out on BSIP funding the first time around or those that got very low per-capita spend. We feel that it was not quite fair, and we have more money, so they should have it. There is actually a list about where the money is going, and I will see if I can send that to all noble Lords who are speaking in today’s debate. That list will be very helpful. We have allocated 50% of the funding on tendered milage, weighted by metrics of deprivation and car ownership, and 50% on population, weighted by delivery confidence. That is how we did it. We have put in deprivation and car ownership, to make sure that it is going to places that need it most.

The noble Baroness talked about capability and capacity of local transport authorities. Again, when I was buses Minister, we focused enormously on this. We feel it is so important that they have the capability to build their own networks, which is why we gave them tens of millions of pounds of funding, specifically for developing the BSIPs. It is not the case that, if they did not have a good system and they did not have the capability and capacity, they necessarily did not get BSIP funding; we did give them the funding. There are councils that are run by other political parties to my own that choose not to spend a single penny on tendered services, and that is very disappointing.

We continue to provide capability and capacity funding to local transport authorities specifically so they can put their enhanced partnerships in place. I hope that that money and that capability and capacity funding will work together to help enhance and protect those vulnerable tendered services.

An evaluation of the £2 fare cap has been published today, so the noble Baroness might want to have a look at that. There are high levels of awareness, with seven in 10 survey respondents being aware of the scheme and one-third of them saying that they felt that the scheme was having a positive impact on their disposable income—all sorts of different things. It is too early to decide whether there is a change in patronage solely down to the fare. Obviously, you have to disaggregate other elements. Other factors may be involved as well but, again, we are keeping a really close eye on that. But, overall, I think that the Get Around for £2 scheme has been hugely positive. I am really pleased that we can talk about it and extend it for quite a long time.

I turn to the issue of zero-emission buses, which is absolutely critical. The Government remain committed to supporting the introduction of 4,000 zero-emission buses. Since February 2020, so far, an estimated 3,452 zero-emission buses have been funded across the UK. In this Parliament, we have awarded £345 million of dedicated funding for zero-emission buses in England. I am aware that the noble Baroness’s zero-emission bus award fell through because the operator was not willing to put up the amount—and that is entirely up to the operator. But that money will go back into the pot, and other operators in different parts of the country will be able to make use of that. We also understand that the award of the grant kicks off a process that necessarily has to go through public procurement rules and so on, and those things take time. It is the case that we have to award the contract, build the bus and get it on the road—so, yes, it will take some time for those particular buses to get on the road, but they are coming. That is a very positive thing, and it is also a very positive thing for our bus manufacturers.

I remain positive about zero-emission buses. I believe that the cost of the buses is falling and that, sometime soon, bus operators may actually choose zero-emission buses without government support, because we will see total cost of ownership about the same. So I think that things are moving in the right direction, and I really welcome that.

[Lord Snape (Lab)]

My Lords, as the former chairman of a major bus operator, I tell the Minister that any financial support for the bus industry is more than welcome. But her announcement today bears no resemblance to the promises made two Prime Ministers ago under the Bus Back Better project. The fact is that, no matter who runs the buses, the question of finance is always going to be there.

I address my remarks to my own Front Bench. There is an apparent belief that all we need to do to create a better bus service across this country is to give powers back to local authorities. Without proper finance, local authorities, which already struggle to provide the services that they have to provide now, will struggle even further.

Can I tell the Minister that the price of the average double-decker is currently around £250,000? A new electric bus costs around £400,000. The short-termism inherent in this package will not incentivise the bus industry to invest over the long term in fleets costing the sort of money that we are talking about here. Although the Minister made the best of a bad job, much of the finance that she has announced today is in fact short-term and not long-term. Without proper long-term financing, the bus industry will continue to struggle.

I hope that as somebody who helped set up what was a rather successful bus partnership between the private sector, in which I worked at the time, and the West Midlands Combined Authority I can say to the Minister, without causing any offence, that, again, finance was the key. We could get that sort of partnership and get successful bus services across the West Midlands provided that we got proper government support. So far, this package does not demonstrate proper long-term support for the bus industry. I have to say to the Minister —I repeat—that, welcome though it is, we need proper long-term planning if the bus industry is to invest properly in the vehicles of the future.

[Baroness Vere of Norbiton (Con)]

I have to remind noble Lords that this is not the only money the bus sector gets; there are many other streams that should be considered. I think there is just over £1 billion in concessions; there is the existing money, £260 million, from BSOG; and obviously there is some money in the block grant. All in all, we have to be realistic about what the bus sector is going to look like in the future. It will have to adjust to new travel patterns, but there is the combination of this new funding and the existing funding, which will stay in place, and we have committed to having conversations with the operators and local authorities about longer-term measures, which will include a reform of BSOG. I would not be surprised if that reform looked very carefully at emissions from buses. One could put that in place, although an element of BSOG is already based on zero-emission buses.

All in all, I am satisfied that the sector is getting the funding it needs, and we need to work as hard as we possibly can with the operators and local transport authorities to encourage people back to buses, including those who use concessionary fares. I believe that if we do that, if we use the capital spending from the BSIP effectively, and if we have bus lanes and bus priority in the right sorts of places to improve the passenger experience, that combination of input is really good. Sitting there and saying, “Just throw money at the problem” is not it. We have thrown money at the problem. We have carefully considered how much money it needs, and we believe that this is a good future for the bus service.