Improving the value of bus services

What happens when the bus fare cap scheme closes for England at the end of the year? By Brian Drury, Sector Director - Bus at SYSTRA

The extension of the bus fare cap scheme for England into 2025 – albeit at a slightly elevated price – came as welcome news for passengers and operators alike, and looked akin to a vote of confidence by the Government in both buses and the effectiveness of revenue subsidy. But what happens next, when the lid finally comes off at the end of the year?

The fare-capping initiative was introduced in 2023, initially for just three months, designed to help the ailing bus industry recover from the covid cataclysm. There is no doubt that it has proven popular with customers, got a lot of bus operators through a very difficult time, and contributed to an upsurge in bus travel. 

While it’s clear that the £2 fare cap and other fare-box initiatives introduced and funded through the Government’s Bus Service Improvement Plans in England have played a part in helping build, or bus, back better, it’s important that we don’t put all our eggs in one basket.

It is interesting, after all, that one demographic that has failed to return to bus transport are those older people who pay nothing at all. After all, a subsidised ticket is not such a bargain if the bus doesn’t show up or is so delayed that you miss a crucial appointment.

Cheap, as is often pointed out by some of our leading bus operators, is not necessarily the same as good value.

The fare cap has had a positive effect on discretionary journeys (those made by people who choose the bus over other options), but only slightly. Instead of simply lowering the price of bus tickets, the trick lies in improving the value of bus services. Convenience is worth a lot, especially as parking becomes more limited and schemes to limit emissions in city centres more common.

If the bus industry is going to successfully wean itself off fare subsidy and find a more sustainable and dynamic approach to growth, it is going to be by making the bus journey of greater value to travellers who have other options.

That means capital investment with a medium or long-term return, rather than the short-term buzz of revenue spending. We need to think about the whole customer journey - safer, well-lit stops with accurate travel information displays; more comfortable, better-connected buses; and infrastructure such as bus lanes, junction improvements and traffic management systems to make journeys faster and more reliable.

The impact of revenue subsidies is limited to the time they are being paid, but capital investment could deliver 10 to 20 years’ benefit for an equivalent sum.

This all matters so much because the environmental and economic benefits of a successful bus infrastructure are hard to overstate. According to research by CPT ‘The Economic Impact of Local Bus Services’ for every £1 invested in bus infrastructure and supporting service delivery more than £5 is returned in economic benefit through access to employment, training and education.

Bus use enables spending of about £40 billion a year in retail and leisure activities. It could be much more. Three-quarters of job seekers have no access to a car and depend on buses to stay economically active. It is estimated that buses contribute another £3 billion to the national economy every year in terms of health and wellbeing, encouraging active travel and reducing stress.

The environmental impact of buses is, if anything, even greater. One bus can potentially take 70 cars off the road, reducing emissions and easing congestion. That is under current conditions with bus infrastructure often far from where it could be.

According to one estimate, if all drivers switched just one journey from car to bus every year, a billion car journeys would be eliminated and two million tonnes of CO2 saved.

This is all true even where diesel buses still operate - so the environmental benefits of low- and zero-emission buses would be markedly greater. Just think, how much further could we go with the right capital investment in the right places? Examples of targeted infrastructure spending applied imaginatively and making a huge impact on local travel patterns are not hard to find.

In our experience, the Kent Fastrack and the Luton to Dunstable Guided Busway made a speedy impact when introduced and will be sustainable for many years to come. These are the kinds of capital investments that make the discretionary traveller think twice about getting behind their wheel, offering low-stress, reliable, fast and comfortable journeys that compete with the car for convenience.

These are benefits that customers are willing to pay a fair price for.

While subsidised fares have played a vital role through assisting people with the cost-of-living crisis and encouraged people back to the bus, it’s pretty obvious that fare subsidies won’t always last forever. Perhaps now is the time to think about long-term investment so that buses provide excellent services and great value for money.

Buses seem to have emerged in recent years from the shadow of rail in the eyes of policy makers. To some degree at least. Their value is being better recognised, and moves are being made to help local authorities extract more value from them in the form of the coming Bus Services Bill.

It would be a shame if we didn’t make this moment count. Because if we do, if we invest in the sort of bus infrastructure the country needs and deserves, and help authorities think about buses with imagination and confidence as integral to well-designed, liveable towns and cities - something my team at SYSTRA has demonstrated so many times - it will be a transformation that will pay for itself for decades to come.