DfT to give bus sector £150m in final tranche of Covid-related support

Funding

Bus and light rail operators across England will get more than £150m of Government support in the final tranche of pandemic-related Bus Recovery Grant (BRG). The package, which will run for six months until October 2022, builds on almost two years’ worth of Government funding to keep bus and light rail networks running, with around £2bn made available to over 160 operators during the pandemic.

The package includes:

• Over £150m to safeguard local transport services as the country emerges from the pandemic
• Funding to help local bus and light rail services across the country as millions of passengers return to the network
• A new deal to ensure services will continue running as operators and local authorities work towards a sustainable future.

Not only will the funding help operators and authorities adapt to changing travel patterns, it will also help the continued delivery of enhanced partnerships, with local authorities working closely with bus companies to draw on their operating knowledge and marketing skills, said the DfT.

The funding will also help councils and operators as they continue working on bus service improvement plans and “delivering substantive improvements to local services”.

Transport secretary Grant Shapps said: “As we look ahead and continue our work to overhaul services and build back better from the pandemic, this funding will also help authorities and operators work together to provide even better services for people right across the country.

“The Government is investing over £3bn in bus services by 2025, including £1.2bn to improve fares, services and infrastructure, and a further £525m for zero emission buses.”

Graham Vidler, chief executive of the Confederation of Passenger Transport (CPT), said: “This welcome funding will help operators have the certainty they need to run an extensive network of services over the coming months as we all adjust to life after the pandemic.

“In the longer term, the bus network will need to adapt to meet passengers’ new travel patterns. Over the coming months, operators will be working closely with local authorities to plan future bus networks and introduce plans to grow passenger numbers.

“This funding is dependent on local areas and operators co-designing a financially sustainable and passenger-focused public transport network, that works for changing travel patterns post-pandemic.”

Chris Cheek, author and consultant/analyst on UK ground passenger transport, described the funding package as “a sensible and necessary extension of the welcome support from Government”. But he added: “In a sense it just kicks the can down the road for another few months. Almost nobody expects passenger numbers to return to pre-Covid levels any time soon, and in the absence of ongoing help, fares and service levels will have to adjust.”

He told LTT: “Bus networks remain an essential tool in the Government’s decarbonisation strategy, but that tool is useless if people can’t switch modes because the services are too expensive or no longer exist. We need to spend the next few months having a sensible, mature debate about how bus services are going to be funded and provided in future, not pretending that everything is going to be all right come October.”

Roger French, a bus industry commentator and former managing director of Brighton and Hove Bus Company, told LTT: “It’s very welcome to see more funding provided to ensure bus passengers don’t face severe cuts to services, but it would have been helpful to have had better notice of this intention rather than leave it until the eleventh hour and fifty ninth minute before deregistrations needed to be submitted with traffic commissioners. And I guess there’s an inevitability it’ll be taken from the famed £3bn originally intended to boost buses like never before.”

The Government’s announcement was described by bus industry investor Julian Peddle as “a bit late, but better late than never”. He told LTT: “It gives some clarity in one of the four potential threats (BRG/ Concessions/BSIPs/fuel) and says we must work towards a sustainable network, however, as always, the devil will be in the detail.”

Bus operators will “need to move from fantasyland to reality” and “stupid rules about running near 100% of services and restrictions on fare changes” should be scrapped from 1 April.

“What is far more worrying is that clarity on concessions, which are actually far more important, has come very very late in the day. Many local authorities have already set their budgets for next year, and changing them will be very difficult. Those local authorities that heed the request to keep concessions at pre-Covid levels should see a more orderly transition.”

Conversely, those councils that cut concessions in line with the DfT’s original guidance will see a much reduced network, and “hopefully a deluge of appeals”, said Peddle. 

“Basically, concessions pay at around 50p for every £1 of cash fare, because of past mythical passenger generation. The over 66 market consists basically of two groups; one who has to use the bus as they are not car owners or drivers, the other who have access to a car but choose to use the bus as it’s free. The latter have reduced their travel dramatically, leading to concessionary passenger levels being under 70% of pre-Covid. So, the generation calculations need to be very different, and I think the generation figure will now be about 10% based on a sample, so operators should expect 90p reimbursement for every £1 of cash fare.”

Peddle expects the setting up of Bus Service Improvement Plans (BSIPs) and Enhancement Plans (EPs) – within the Government’s National Bus Strategy –  will be delayed until September. All 79 local transport authorities in England (outside London) have submitted plans for enhanced partnerships or franchising schemes. For the “lucky 16” BSIPs or EPs that will get substantial funding, this will coincide with the end of BRG, said Peddle. “For the other 60 or so it’s not clear if there will be any further funding rounds.”