Investment in local bus services offer excellent value-for-money, says report

Alongside health and environmental benefits, a typical package of public investment to improve infrastructure for buses and support better services, can generate returns of £4.55 for every £1 invested

Just days before the Transport Secretary announced the first stop on journey to Better Buses, with new powers to take control of bus services to be expanded to every community, new independent research on the scale and breadth of economic benefits delivered by local bus services to the British economy highlights how investment in them by government offers.

The Economic Impact of Local Bus Services, commissioned by the Confederation of Passenger Transport  shows:

• Bus operators directly employ 105,000 people and support employment of a?further 53,000 in the sector’s supply chain – which provides an £11 bn boost to?the British economy

• Bus services deliver far more economic benefits than this, with passengers?spending £1 in every £10 spent on the High Street - contributing a total of?almost £40bn every year to local economies

• Bus commuters earn £72 bn a year and pay taxes of £15 bn

Alison Edwards from the Confederation of Passenger Transport will be speaking about this report at Quality Bus 2024: Book now

Alongside health and environmental benefits, a typical package of public?investment to improve infrastructure for buses and support better services,?can generate returns of £4.55 for every £1 invested.

The research also shows that buses deliver a host of wider benefits for both passengers and  local communities - including access to jobs, education and training worth £8.7bn, health benefits worth £2.8bn, support for volunteer work valued at over £1bn, and a reduction in congestion worth £600m per year.

Launching the results of research in Derby Graham Vidler, CEO at the Confederation of Passenger Transport said: “This new research shows the tremendous economic contribution driven by the 100,000 people who work in the bus sector, the 50,000 people working in our supply chain, and the millions of people who use buses every day.

"It highlights how buses support every aspect of our lives, boosting local economies, connecting communities, improving health, and protecting our environment. It also shows that investing in better bus services is exceptional value-for-money and offers a speedy, flexible way to support green growth across the whole country.”

Welcoming the research at the launch, Minister for Local Transport Simon Lightwood MP also said: "We know how important buses are to communities as an affordable, green travel choice which help grow our economy and provide access to jobs too. Our Buses Bill will help local councils transform their bus networks to deliver better value for money and more reliable services, for passengers.”

Vidler added: "We think there's a very strong case for investing in the nation's favourite mode of public transport. Absolutely the potential is there. Take Norfolk as an example, not normally seen as a metropolitan hotbed of public transport, but what they have achieved over the last couple of years is a huge investment in extending services, cutting fares and giving busses more priority on the routes into Norwich bus station in particular, the result of that is a 16% growth in passengers over the last year.

"This is a really tremendous example, I think, of what can be done when local authorities, bus operators and central government work together and back Britain's buses."

CPT commissioned this research to provide an up-to-date appraisal of the scale and contribution buses makes economically (and socially) to inform national and regional level for investment in better services and infrastructure.

Speaking about the research, Claire Ward, Mayor of the East Midlands said: “The launch of this new report by the Confederation of Passenger Transport is both timely and vital, highlighting the essential role that buses play in driving the economic and social vibrancy of our region.

"It’s particularly encouraging to see Nottingham recognised for its high level of bus sector employment and the innovative practices of our local operators, like the Skylink service to East Midlands Airport and the excellent work by Trentbarton and NCT. These examples underscore the critical importance of buses in connecting our communities, especially in rural areas where they serve as a lifeline for so many.

“In Derbyshire and Nottinghamshire, the economic impact of our bus services is profound, with £1.8 billion generated in the East Midlands Combined County Authority area alone. This report confirms what we already know: buses are not just a mode of transport but a cornerstone of our local economy. As we look ahead to new opportunities with the Better Buses Bill, it is crucial that we continue to invest in our bus networks, ensuring they remain sustainable, innovative, and responsive to the needs of our communities. By working closely with operators, we can deliver a network that truly benefits everyone in the East Midlands."

Buses are the nation’s most popular form of public transport - facilitating over ten million journeys a day. For every journey made on the national rail network, more than 2.5 journeys are made by bus.

The research quantifies various kinds of economic impact made by buses.

The bus sector itself, worth more than £11 billion per year to the GB economy, directly employed 105,500 in 2022 - as drivers, mechanics, schedulers, operations managers, customer service teams, and in finance, information technology, human resources, and general management. A further 53,000 people also worked in the sector’s own supply chains - from vehicle manufacturers and fuel suppliers, to running bus stations, stops, and depots as well as vehicle maintenance, parts, real-time information, and ticket technology. All these workers also spend their wages in local economies, which in turn supports additional local employment.

For many people, buses are the best way to access work, education, healthcare, volunteer, and leisure activities. This research confirms how compared to not travelling at all, or travelling another way, bus services provide lower travel costs and improved connections for passengers worth £8.7 billion per year. Using the bus also generates a wide range of health and wellbeing improvements that the research suggests have a combined economic impact of £15.6 billion. In particular, the health benefits of bus being a more active travel mode are worth £2.8 billion per year while reduced congestion and modal transfer is valued at £0.6 billion.

Bus passengers spend £39.1bn billion per year in their local economies. On average, bus passengers - travelling for leisure, shopping or to get to work - spend £32 per return journey in shops, cafes, restaurants, and leisure facilities at their destinations. This spending supports economic activity in local and regional centres across Britain.

More than two million commuters rely on buses and provide businesses in local economies with labour. These bus passengers earn approximately £72 billion per year and generate additional tax revenue of over £15 billion per year. Without local bus services, some passengers might find alternative ways to travel but some trips would simply not take place, replaced by online purchases instead or by no spending at all. The research estimates the impact of this could mean High Streets lose £9.2 billion per year.

The research also confirms the value of public spending to improve bus services: Taking a selection of typical investments including alterations that give buses priority over other traffic on the roads, higher service frequencies, and lower fares, researchers calculate that every £1 of public funding spent on a typical package of measures can generate at least £4.55 in economic benefits, a figure that rises to over £5 for more targeted interventions such as bus priority measures.

In addition, the research puts a figure of £3.5 billion per year on the economic value of the bus network for people who don’t actually use the bus but want or need the option to be available.