Sing Alleluia and let the word go forth: white smoke has billowed from the chimney atop Number 11 – we have a Spending Review
The chancellor at Taff’s Well Rail Depot (image: Kirsty O’Connor / Treasury)
Among the bountiful gifts bestowed by the Chancellor are a four-year funding settlement to underpin England’s bus sector, a multi-billion-pound bonanza for nine city regions, and yet another reprieve for something that has morphed from a short-term relief to a lasting (if fitful) sinkhole: the cap on single bus fares. There’s the small matter of a 5% reduction in day-to-day spending, but that’s mostly due to the sunsetting of Covid-era subsidies for the rebounding rail sector – and amply offset by generous capital grants.
After years of stop-start initiatives, there is now a sense of permanence and permission. Angels soar among the headlines and the devil lurks amid the details. We all know that. Which is why it’s often telling what a politician chooses to announce before the announcement (the spending preview, if you will) and what they keep back (or bury). I’ll delve into the devil’s lair in a moment, but first, the bigger picture. Lots of eye-catchers, plenty of zeroes, and a good effort to acknowledge the existence of a country beyond London and the South East. What strikes me, however, is that the spending has leapfrogged the strategy: Rachel Reeves has allocated vast sums of money (much of it to specific projects) before Heidi Alexander unveils the National Integrated Transport Strategy. The optimist in me hopes their teams compared notes behind closed doors; if nothing else, it’s clear the Treasury consulted mayors to align with local priorities.
At nearly £23bn, this is the biggest-ever investment in local public transport. There’s another £35bn allocated to long-distance rail, including HS2. A cynic might suggest it’s the political chef’s special, served up chancellor-style: reheated announcements from previous governments. Many of the things dished up by Reeves were already on Rishi Sunak’s menu for ‘Network North’ – although, to be fair, that’s largely because they were lobbied by the same mayors. The question is: have the sums been done again to account for inflation after two years of inaction? It doesn’t look like they have… What do the ‘ironclad’ fiscal rules say about that?
The centrepiece of the PR – and the bulk of the price tag – is £15.6bn for city regions, touted as the key to ‘national renewal’ by unlocking economic growth and opening the door for social inclusion. Two seemingly contradictory things can be true at once: that this is the most cash ever splashed on infrastructure outside London, and that it still pales in comparison to what we spend in and around London. Case in point: this £15.6bn, which covers everything from new trams in Bradford to mass transit in Bristol, is dwarfed by the £18.8bn bill for the Elizabeth Line alone.
Nevertheless, any progress in narrowing the North-South divide is good news. ‘Levelling up’ has been talked about for long enough and dreamed of even longer. But the solution to London-centric bias isn’t scattering a handful of mini-Londons across the North and calling it a day. If vast swathes of England are left behind, it doesn’t matter whether they’re losing out to London or Liverpool. Smaller cities, mid-sized towns, and rural counties make up two-thirds of the population, but will receive less than a quarter of this new money. That’s not just practically imbalanced, it’s politically ironic: the Transport Committee made rural connectivity the subject of its first inquiry in this Parliament whilst the Treasury has actively broadened the gap between conurbations and hinterlands.
Mind you, living in Scotland, I’m inclined to suggest that residents and officials in those areas welcome whatever they get – because Holyrood hasn’t announced (let alone delivered) anything nearly as ambitious. The closest we ever got was the £500m Bus Partnership Fund – which was 95% unspent when it was ‘paused’, then ditched, then eventually replaced with a paltry pot fifty times smaller. The Scottish Government also laid down powers for franchising but hasn’t put up a penny to enact them. Instead, they’re ploughing money into free travel for those least likely (or not even old enough) to drive.
After years of stop-start initiatives, there is now a sense of permanence and permission
Most of the headline-grabbing projects involve things that run on rails or pretend to (call them what you want and dress them up how you like: a ‘trackless tram’ is a bendy bus with delusions of grandeur). Which raises a question: for all the attention buses have had since Boris Johnson’s premiership, do some in the political bubble still secretly wince at them as old-fashioned, or, dare I say, second-class? Why else do they tend to develop Magpie Syndrome (a chronic distraction by the big, shiny things) when in the real world it’s a well-known and oft-stated fact that buses are by far the most popular and cost-effective form of public transport? Money to make buses better for everyday purposes was tucked away on page 81. Even the fare cap extension was relegated from headliner to support act. Buses may not be glamorous or newfangled or whatever, but they’re the workhorses of British society. They deserve a place in the public mind not as some nostalgic relic but as economic enablers and social equalisers. Transport policy isn’t about cutting ribbons, it’s about tying people and places together.
Plans to buy and deploy a thousand electric buses in Greater Manchester are a quantum leap in our journey to net zero (considering there are only about three-or-four thousand across England now). And when the Bee Network retires more than half its fleet in four years, there will be a fair few modern, low-emission buses on the second-hand market. That’s good news for other operators and authorities looking to green their fleets on a budget. But the challenge for TfGM is what happens next: buying EVs in a big bang means replacing them in a big echo. They’ll need to save up and brace themselves for the intense (and costly) work of swapping out most of the fleet in uneven bursts.
Outside the big metros, there will be £750m per year “to maintain and improve bus services”. At long last, this is the kind of multi-year settlement the industry has always wanted: stability boosts confidence, supports investment and stimulates growth. But a decade-and-a-half of austerity has hollowed out councils, leaving many of them devoid of the skills, staff, and capacity they need to spend temporary funding packages effectively. That, of course, is where my SYSTRA colleagues and I might come in. One of us, for instance, helped Luton secure £19m in 2022 and has since worked with them to deliver sector-leading reforms.
Rachel Reeves is right to break from sticking-plaster politics. She is right to invest in infrastructure
It helps that the funding will be allocated automatically based on population and deprivation, not competitive bidding. We don’t yet know whether £285m for BSOG (Bus Service Operators Grant) sits within or alongside that £750m sum, but we do know that it includes money to test franchising in rural areas (with Cheshire and North Yorkshire earmarked for pilots). It also includes the £151m-a-year bill of capping single fares at £3 until the spring of 2027. That means less left over for BSIPs (Bus Service Improvement Plans) – which actually make services better – than in previous years. Unless some BSIP-funded initiatives become commercially viable, they may have to be scaled back next April.
This leads me to reservations about the fare cap. For months, as the price rose and expiry loomed, ministers have been tacitly downplaying it, arguing that fewer than one-in-six journeys benefit from it and that more targeted measures would take its place. Now, they must pretend that never happened and that this initiative (despite its low value for money) is here to stay… for now… again. Having been subject to six expiries, five extensions and two price hikes (one that happened, one that didn’t) in less than three years, it’s a will-they-won’t-they palaver on the level of Ross and Rachel’s tortuous relationship in Friends. The fare cap has become too politically ‘nice’ to kill, and so another stay of execution has been waved through.
While the cap saves passengers a few pence here or a couple of quid there, it does nothing to improve the quality or reach of bus services themselves. It doesn’t bolster frequency on underserved routes or restore lifelines in rural England. It doesn’t pay for more drivers, new shelters, or better information. It simply distorts pricing whilst costs creep up in the background. Worse, with no plan to taper the price up, it creates a cliff-edge that nobody wants to face – or, apparently, deal with.
Patronage derived from discounts only lasts as long as the subsidy that underwrites it. But patronage generated by enhanced services is more likely to endure. A focus on price alone ignores a basic truth: that people are willing to pay for services worth using. What they won’t do is stick with an infrequent, unreliable, or patchy network – no matter how cheap the ticket is.
Rachel Reeves is right to break from sticking-plaster politics. She is right to invest in infrastructure, and to take seriously the social, economic and environmental dividends of good public transport. The real test, though, is not how much the government spends, but whether it does so fairly, wisely, and in a way that pays off. That means funding buses in Exmoor and East Yorkshire, as well as trams in Edgbaston and Eccles. Because we need a transport system that works for everyone, wherever they live. Until then, the humble bus stop remains a symbol; not of progress, but of those still waiting for it.
ABOUT THE AUTHOR: Marc Winsland is principal consultant – bus operations at SYSTRA. He was previously commercial manager at bus operator Xplore Dundee.
This story appears inside the latest issue of Passenger Transport.
Breaking down the transport bonanza
by Passenger Transport on Jun 26, 2025 • 1:48 pm No CommentsSing Alleluia and let the word go forth: white smoke has billowed from the chimney atop Number 11 – we have a Spending Review
Among the bountiful gifts bestowed by the Chancellor are a four-year funding settlement to underpin England’s bus sector, a multi-billion-pound bonanza for nine city regions, and yet another reprieve for something that has morphed from a short-term relief to a lasting (if fitful) sinkhole: the cap on single bus fares. There’s the small matter of a 5% reduction in day-to-day spending, but that’s mostly due to the sunsetting of Covid-era subsidies for the rebounding rail sector – and amply offset by generous capital grants.
After years of stop-start initiatives, there is now a sense of permanence and permission. Angels soar among the headlines and the devil lurks amid the details. We all know that. Which is why it’s often telling what a politician chooses to announce before the announcement (the spending preview, if you will) and what they keep back (or bury). I’ll delve into the devil’s lair in a moment, but first, the bigger picture. Lots of eye-catchers, plenty of zeroes, and a good effort to acknowledge the existence of a country beyond London and the South East. What strikes me, however, is that the spending has leapfrogged the strategy: Rachel Reeves has allocated vast sums of money (much of it to specific projects) before Heidi Alexander unveils the National Integrated Transport Strategy. The optimist in me hopes their teams compared notes behind closed doors; if nothing else, it’s clear the Treasury consulted mayors to align with local priorities.
At nearly £23bn, this is the biggest-ever investment in local public transport. There’s another £35bn allocated to long-distance rail, including HS2. A cynic might suggest it’s the political chef’s special, served up chancellor-style: reheated announcements from previous governments. Many of the things dished up by Reeves were already on Rishi Sunak’s menu for ‘Network North’ – although, to be fair, that’s largely because they were lobbied by the same mayors. The question is: have the sums been done again to account for inflation after two years of inaction? It doesn’t look like they have… What do the ‘ironclad’ fiscal rules say about that?
The centrepiece of the PR – and the bulk of the price tag – is £15.6bn for city regions, touted as the key to ‘national renewal’ by unlocking economic growth and opening the door for social inclusion. Two seemingly contradictory things can be true at once: that this is the most cash ever splashed on infrastructure outside London, and that it still pales in comparison to what we spend in and around London. Case in point: this £15.6bn, which covers everything from new trams in Bradford to mass transit in Bristol, is dwarfed by the £18.8bn bill for the Elizabeth Line alone.
Nevertheless, any progress in narrowing the North-South divide is good news. ‘Levelling up’ has been talked about for long enough and dreamed of even longer. But the solution to London-centric bias isn’t scattering a handful of mini-Londons across the North and calling it a day. If vast swathes of England are left behind, it doesn’t matter whether they’re losing out to London or Liverpool. Smaller cities, mid-sized towns, and rural counties make up two-thirds of the population, but will receive less than a quarter of this new money. That’s not just practically imbalanced, it’s politically ironic: the Transport Committee made rural connectivity the subject of its first inquiry in this Parliament whilst the Treasury has actively broadened the gap between conurbations and hinterlands.
Mind you, living in Scotland, I’m inclined to suggest that residents and officials in those areas welcome whatever they get – because Holyrood hasn’t announced (let alone delivered) anything nearly as ambitious. The closest we ever got was the £500m Bus Partnership Fund – which was 95% unspent when it was ‘paused’, then ditched, then eventually replaced with a paltry pot fifty times smaller. The Scottish Government also laid down powers for franchising but hasn’t put up a penny to enact them. Instead, they’re ploughing money into free travel for those least likely (or not even old enough) to drive.
Most of the headline-grabbing projects involve things that run on rails or pretend to (call them what you want and dress them up how you like: a ‘trackless tram’ is a bendy bus with delusions of grandeur). Which raises a question: for all the attention buses have had since Boris Johnson’s premiership, do some in the political bubble still secretly wince at them as old-fashioned, or, dare I say, second-class? Why else do they tend to develop Magpie Syndrome (a chronic distraction by the big, shiny things) when in the real world it’s a well-known and oft-stated fact that buses are by far the most popular and cost-effective form of public transport? Money to make buses better for everyday purposes was tucked away on page 81. Even the fare cap extension was relegated from headliner to support act. Buses may not be glamorous or newfangled or whatever, but they’re the workhorses of British society. They deserve a place in the public mind not as some nostalgic relic but as economic enablers and social equalisers. Transport policy isn’t about cutting ribbons, it’s about tying people and places together.
Plans to buy and deploy a thousand electric buses in Greater Manchester are a quantum leap in our journey to net zero (considering there are only about three-or-four thousand across England now). And when the Bee Network retires more than half its fleet in four years, there will be a fair few modern, low-emission buses on the second-hand market. That’s good news for other operators and authorities looking to green their fleets on a budget. But the challenge for TfGM is what happens next: buying EVs in a big bang means replacing them in a big echo. They’ll need to save up and brace themselves for the intense (and costly) work of swapping out most of the fleet in uneven bursts.
Outside the big metros, there will be £750m per year “to maintain and improve bus services”. At long last, this is the kind of multi-year settlement the industry has always wanted: stability boosts confidence, supports investment and stimulates growth. But a decade-and-a-half of austerity has hollowed out councils, leaving many of them devoid of the skills, staff, and capacity they need to spend temporary funding packages effectively. That, of course, is where my SYSTRA colleagues and I might come in. One of us, for instance, helped Luton secure £19m in 2022 and has since worked with them to deliver sector-leading reforms.
It helps that the funding will be allocated automatically based on population and deprivation, not competitive bidding. We don’t yet know whether £285m for BSOG (Bus Service Operators Grant) sits within or alongside that £750m sum, but we do know that it includes money to test franchising in rural areas (with Cheshire and North Yorkshire earmarked for pilots). It also includes the £151m-a-year bill of capping single fares at £3 until the spring of 2027. That means less left over for BSIPs (Bus Service Improvement Plans) – which actually make services better – than in previous years. Unless some BSIP-funded initiatives become commercially viable, they may have to be scaled back next April.
This leads me to reservations about the fare cap. For months, as the price rose and expiry loomed, ministers have been tacitly downplaying it, arguing that fewer than one-in-six journeys benefit from it and that more targeted measures would take its place. Now, they must pretend that never happened and that this initiative (despite its low value for money) is here to stay… for now… again. Having been subject to six expiries, five extensions and two price hikes (one that happened, one that didn’t) in less than three years, it’s a will-they-won’t-they palaver on the level of Ross and Rachel’s tortuous relationship in Friends. The fare cap has become too politically ‘nice’ to kill, and so another stay of execution has been waved through.
While the cap saves passengers a few pence here or a couple of quid there, it does nothing to improve the quality or reach of bus services themselves. It doesn’t bolster frequency on underserved routes or restore lifelines in rural England. It doesn’t pay for more drivers, new shelters, or better information. It simply distorts pricing whilst costs creep up in the background. Worse, with no plan to taper the price up, it creates a cliff-edge that nobody wants to face – or, apparently, deal with.
Patronage derived from discounts only lasts as long as the subsidy that underwrites it. But patronage generated by enhanced services is more likely to endure. A focus on price alone ignores a basic truth: that people are willing to pay for services worth using. What they won’t do is stick with an infrequent, unreliable, or patchy network – no matter how cheap the ticket is.
Rachel Reeves is right to break from sticking-plaster politics. She is right to invest in infrastructure, and to take seriously the social, economic and environmental dividends of good public transport. The real test, though, is not how much the government spends, but whether it does so fairly, wisely, and in a way that pays off. That means funding buses in Exmoor and East Yorkshire, as well as trams in Edgbaston and Eccles. Because we need a transport system that works for everyone, wherever they live. Until then, the humble bus stop remains a symbol; not of progress, but of those still waiting for it.
ABOUT THE AUTHOR: Marc Winsland is principal consultant – bus operations at SYSTRA. He was previously commercial manager at bus operator Xplore Dundee.
This story appears inside the latest issue of Passenger Transport.
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