Buses: Funding

Baroness Winterton of Doncaster Excerpts

Wednesday 17th May 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)]

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.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State.

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[Mr Holden]

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.

[Madam Deputy Speaker]

I call the Chair of the Select Committee on Transport.

[Iain Stewart (Milton Keynes South) (Con)]

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

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[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

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

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

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

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

Will the Minister do the right thing, unlock the logjam in the ZEBRA scheme in England and at least try to catch up with its success in Scotland, and will he confirm that every penny spent as a result of this announcement will be subject to Barnett consequentials to allow the Scottish Government to continue their investment in our public transport network—investment that builds for an electric future?