The forthcoming Spending Review will set out priorities for taxpayers’ funds up until 2030. It will be a big moment for buses
Simon Lightwood, the minister for local transport, at the CPT’s annual conference in January
By Alison Edwards
Unless you’ve spent months hiding under your duvet, you will be aware that the government is facing a tricky conundrum on its finances. Three ‘d’s – defence, domestic spending and debt – are vying for the chancellor’s attention.
Demands on the Treasury are immense. And they will reach a head in June, when Rachel Reeves completes a multi-year Spending Review setting out priorities for taxpayers’ funds as far ahead as 2030.
The media has been full of speculation about winners and losers. There will, Reeves acknowledges, be “difficult decisions”. That is polite language for blood on the carpet.
So how can the bus sector best make its case for a long-term public funding – and how can we best make our industry’s voice heard in a crowded, febrile environment?
It is hard to overstate just how vital this moment is in setting the parameters for the next five years. Darren Jones, the chief secretary to the Treasury, has described the review as “one of the most important political processes of any government”. The chancellor says that as part of the review, she intends to deliver public services by “totally rewiring how the government spends money”.
Buses, as we all know, account for two-thirds of public transport journeys and are used by 11 million people every day. The bus industry employs 105,000 people and supports 53,000 further jobs in the supply chain. We need to demonstrate the true value all those people can deliver – economically, socially and environmentally.
In February, the Confederation of Passenger Transport put in a compelling submission to the Treasury and will be fighting tooth and nail for a strong financial settlement for our industry. Our goal is to demonstrate that every penny invested in bus services will deliver a payback many times over.
At its core, we need to link buses to the government’s central mission of kickstarting economic growth, and to demonstrate the positive contribution we can make. It was encouraging, at the CPT’s annual conference in January, to hear Simon Lightwood, the minister for local transport, put buses at the heart of this mission.
“If growth is an end, then buses and coaches are a means,” the minister told CPT Conference, adding: “The cycle of decline stops now.”
In broad terms, the bus network outside London costs £3.5bn to run. While the majority of this is funded through fares, a minority has always – and will always – need public support. That is the case under commercial operation and it will be even more evident in newly franchised areas.
Simply to keep services as they are requires a continuation of the current level of investment from government – which amounts to £750m annually, of which £250m pays for the Bus Services Operators Grant and the rest is funnelled through local authorities.
It is hard to overstate just how vital this moment is in setting the parameters for the next five years
What does that buy? Well, the core benefits of buses are well documented – each pound invested brings £4.55 of benefits to the environment, to the health of the nation and to communities. That includes connecting people to jobs and education, tackling the nation’s epidemic of loneliness, delivering footfall to high streets and reducing traffic congestion.
The public, though, want and deserve more than the status quo – and so does the government. If the mission is growth, then private and public must work together on broadening and deepening bus services. The CPT is calling for a bold funding package that will transform the bus network, delivering immediate, visible benefits.
An additional £205m of public funding annually – just over £500,000 a day – would boost the bus network by 5%, allowing local communities to benefit from buses travelling 36 million miles a year – enough to travel more than 1,400 times round the world.
Far from being a drain on resource, this will deliver a quick payback of £500m in economic benefits to passengers according to the Department for Transport’s own assessment of the value for money of tendered bus services.
This injection would build back some of the services which have been eroded away over the last decade and would help to seed the “bus revolution” that Labour pledged when the party took office. More buses would bring people closer to jobs and employment, and would stimulate spending on high streets nationwide.
A bigger payback still would be generated through bus priority measures to speed up buses, making them more attractive to passengers and cheaper to run. Our submission to the Treasury cites research that suggests £200m invested in bus lanes and priority schemes would generate £1bn in economic benefits by encouraging millions of extra passenger journeys. Importantly, it would also reduce the long-term need for public funding.
There are plenty of clear examples of bus priority schemes working. In Portsmouth, for example, priority schemes and better bus stop infrastructure has been matched with turn up and go services, and in the year to March 2024, journeys were up by 17%.
Across the harbour in Gosport, the Eclipse dedicated busway, built on a disused railway, has taken buses out of traffic, cutting journey times by a quarter and prompting a 60% increase in passenger numbers. There is no doubt that these priority schemes work – and that they are an investment that pays back in spades.
Finally, a key mission for the government is to reach net zero, and to turn the UK into a clean energy superpower. Retooling the bus fleet for a zero emission future is a once-in-a-century project, and we’re making good progress – six out of ten new buses registered last year were zero emission, and there are now more than 3,000 electric or hydrogen vehicles on the roads.
But bus operators cannot get there alone. Price volatility in the energy markets and the cost of grid connections to depots are challenges to the business case for zero emission. So is the sheer capital outlay on buses, in an environment in which tender contracts for routes are typically only around three years. We need to work in partnership to make decarbonisation happen.
If growth is an end, then buses and coaches are a means … The cycle of decline stops now
We have proposed to the Treasury that a £200m annual investment in zero emission buses would unlock a £500m contribution from the private sector – a ratio of 2.5-to-1 that would keep us on a path towards a cleaner, quieter national fleet.
Sound like a long shopping list? Not really. More like an opportunity for the government to invest in an industry that will genuinely and tangibly contribute to achieving its goals, with a quick payback.
And it is well worth putting these numbers in context. Our friends in the rail industry received £12.5bn of government funding in the year to March 2024 according to the Office of Rail and Road, which is a greater sum than the £10.4bn generated from rail passengers’ fares.
We are neither critical nor begrudging of that money – rail, alongside bus, plays a vital role in the economy, and in addressing the challenges of productivity, climate change and congestion. But it is worth hammering home the point that, as the buses minister acknowledged to CPT Conference this year, buses “provide a lifeline, particularly for the poorest in society, who catch ten times as many buses”.
There is much to be proud of in our industry. Look no further than areas such as Norfolk, Portsmouth, Leicester and Brighton to see the commercial model thriving. Nationwide, eight out of ten passengers say they’re happy with their journeys.
Over the last eight years, private operators have invested more than £2bn of their own funds in low-carbon bus technology. And on the skills front, 2,202 drivers and engineers have completed apprenticeships over the last five years.
As an industry, we don’t always agree with government. We do not share the belief, for example, that franchising is a silver bullet to enhance services. Or that the creation of more municipal bus companies is necessarily the best use of taxpayers’ capital.
But fundamentally, we share the same goals – to deliver frequent, reliable, affordable buses for all. And it has been encouraging to see not just an acknowledgement of the importance of buses, but an enthusiasm for them from the government.
Just days after last year’s general election, the then transport secretary set out five strategic priorities. One of them was “improving bus services and growing usage across the country”. Buses, she said, are the “lifeblood of communities”, adding: “Change starts now”.
Talk of change, though, needs to be backed by hard cash. The CPT will make a vigorous case, at every turn, for the compelling investment return on buses. We encourage the entire bus community to do the same. With the right long-term funding, we know what our industry can deliver. It is time to convert words into action
ABOUT THE AUTHOR: Alison Edwards is director of policy and external relations at the Confederation of Passenger Transport
This story appears inside the latest issue of Passenger Transport.
What does a fair deal for buses look like?
by Passenger Transport on Mar 7, 2025 • 3:32 pm No CommentsThe forthcoming Spending Review will set out priorities for taxpayers’ funds up until 2030. It will be a big moment for buses
By Alison Edwards
Unless you’ve spent months hiding under your duvet, you will be aware that the government is facing a tricky conundrum on its finances. Three ‘d’s – defence, domestic spending and debt – are vying for the chancellor’s attention.
Demands on the Treasury are immense. And they will reach a head in June, when Rachel Reeves completes a multi-year Spending Review setting out priorities for taxpayers’ funds as far ahead as 2030.
The media has been full of speculation about winners and losers. There will, Reeves acknowledges, be “difficult decisions”. That is polite language for blood on the carpet.
So how can the bus sector best make its case for a long-term public funding – and how can we best make our industry’s voice heard in a crowded, febrile environment?
It is hard to overstate just how vital this moment is in setting the parameters for the next five years. Darren Jones, the chief secretary to the Treasury, has described the review as “one of the most important political processes of any government”. The chancellor says that as part of the review, she intends to deliver public services by “totally rewiring how the government spends money”.
Buses, as we all know, account for two-thirds of public transport journeys and are used by 11 million people every day. The bus industry employs 105,000 people and supports 53,000 further jobs in the supply chain. We need to demonstrate the true value all those people can deliver – economically, socially and environmentally.
In February, the Confederation of Passenger Transport put in a compelling submission to the Treasury and will be fighting tooth and nail for a strong financial settlement for our industry. Our goal is to demonstrate that every penny invested in bus services will deliver a payback many times over.
At its core, we need to link buses to the government’s central mission of kickstarting economic growth, and to demonstrate the positive contribution we can make. It was encouraging, at the CPT’s annual conference in January, to hear Simon Lightwood, the minister for local transport, put buses at the heart of this mission.
“If growth is an end, then buses and coaches are a means,” the minister told CPT Conference, adding: “The cycle of decline stops now.”
In broad terms, the bus network outside London costs £3.5bn to run. While the majority of this is funded through fares, a minority has always – and will always – need public support. That is the case under commercial operation and it will be even more evident in newly franchised areas.
Simply to keep services as they are requires a continuation of the current level of investment from government – which amounts to £750m annually, of which £250m pays for the Bus Services Operators Grant and the rest is funnelled through local authorities.
What does that buy? Well, the core benefits of buses are well documented – each pound invested brings £4.55 of benefits to the environment, to the health of the nation and to communities. That includes connecting people to jobs and education, tackling the nation’s epidemic of loneliness, delivering footfall to high streets and reducing traffic congestion.
The public, though, want and deserve more than the status quo – and so does the government. If the mission is growth, then private and public must work together on broadening and deepening bus services. The CPT is calling for a bold funding package that will transform the bus network, delivering immediate, visible benefits.
An additional £205m of public funding annually – just over £500,000 a day – would boost the bus network by 5%, allowing local communities to benefit from buses travelling 36 million miles a year – enough to travel more than 1,400 times round the world.
Far from being a drain on resource, this will deliver a quick payback of £500m in economic benefits to passengers according to the Department for Transport’s own assessment of the value for money of tendered bus services.
This injection would build back some of the services which have been eroded away over the last decade and would help to seed the “bus revolution” that Labour pledged when the party took office. More buses would bring people closer to jobs and employment, and would stimulate spending on high streets nationwide.
A bigger payback still would be generated through bus priority measures to speed up buses, making them more attractive to passengers and cheaper to run. Our submission to the Treasury cites research that suggests £200m invested in bus lanes and priority schemes would generate £1bn in economic benefits by encouraging millions of extra passenger journeys. Importantly, it would also reduce the long-term need for public funding.
There are plenty of clear examples of bus priority schemes working. In Portsmouth, for example, priority schemes and better bus stop infrastructure has been matched with turn up and go services, and in the year to March 2024, journeys were up by 17%.
Across the harbour in Gosport, the Eclipse dedicated busway, built on a disused railway, has taken buses out of traffic, cutting journey times by a quarter and prompting a 60% increase in passenger numbers. There is no doubt that these priority schemes work – and that they are an investment that pays back in spades.
Finally, a key mission for the government is to reach net zero, and to turn the UK into a clean energy superpower. Retooling the bus fleet for a zero emission future is a once-in-a-century project, and we’re making good progress – six out of ten new buses registered last year were zero emission, and there are now more than 3,000 electric or hydrogen vehicles on the roads.
But bus operators cannot get there alone. Price volatility in the energy markets and the cost of grid connections to depots are challenges to the business case for zero emission. So is the sheer capital outlay on buses, in an environment in which tender contracts for routes are typically only around three years. We need to work in partnership to make decarbonisation happen.
We have proposed to the Treasury that a £200m annual investment in zero emission buses would unlock a £500m contribution from the private sector – a ratio of 2.5-to-1 that would keep us on a path towards a cleaner, quieter national fleet.
Sound like a long shopping list? Not really. More like an opportunity for the government to invest in an industry that will genuinely and tangibly contribute to achieving its goals, with a quick payback.
And it is well worth putting these numbers in context. Our friends in the rail industry received £12.5bn of government funding in the year to March 2024 according to the Office of Rail and Road, which is a greater sum than the £10.4bn generated from rail passengers’ fares.
We are neither critical nor begrudging of that money – rail, alongside bus, plays a vital role in the economy, and in addressing the challenges of productivity, climate change and congestion. But it is worth hammering home the point that, as the buses minister acknowledged to CPT Conference this year, buses “provide a lifeline, particularly for the poorest in society, who catch ten times as many buses”.
There is much to be proud of in our industry. Look no further than areas such as Norfolk, Portsmouth, Leicester and Brighton to see the commercial model thriving. Nationwide, eight out of ten passengers say they’re happy with their journeys.
Over the last eight years, private operators have invested more than £2bn of their own funds in low-carbon bus technology. And on the skills front, 2,202 drivers and engineers have completed apprenticeships over the last five years.
As an industry, we don’t always agree with government. We do not share the belief, for example, that franchising is a silver bullet to enhance services. Or that the creation of more municipal bus companies is necessarily the best use of taxpayers’ capital.
But fundamentally, we share the same goals – to deliver frequent, reliable, affordable buses for all. And it has been encouraging to see not just an acknowledgement of the importance of buses, but an enthusiasm for them from the government.
Just days after last year’s general election, the then transport secretary set out five strategic priorities. One of them was “improving bus services and growing usage across the country”. Buses, she said, are the “lifeblood of communities”, adding: “Change starts now”.
Talk of change, though, needs to be backed by hard cash. The CPT will make a vigorous case, at every turn, for the compelling investment return on buses. We encourage the entire bus community to do the same. With the right long-term funding, we know what our industry can deliver. It is time to convert words into action
ABOUT THE AUTHOR: Alison Edwards is director of policy and external relations at the Confederation of Passenger Transport
This story appears inside the latest issue of Passenger Transport.
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