Despite significant bus investment in recent years, a new report by the National Audit Office calls for better strategy and targeted funding
Report noted that bus franchising is complex and costly
The Department for Transport must deliver clearer strategic direction and cohesive funding if local transport authorities in England are to reverse the long-term decline in bus services. That is the key message contained in a new report from the National Audit Office (NAO).
The report, Local Bus Services in England, which was published at the end of June, finds that while the government has invested £5.9bn into the bus sector since 2020, which includes emergency funding support during and in the aftermath of the Covid-19 pandemic, passenger numbers remain 9% below pre-pandemic levels. Local bus service networks have also continued to decline.
The NAO found that many of the government’s improvement measures, such as Bus Service Improvement Plans (BSIPs), the £2 fare cap, and enhanced partnerships between LTAs and operators, had delivered benefits. However, their effectiveness was hindered by short-term, fragmented funding and delays in implementation. Only 10% of the planned capital improvements have also so far been delivered.
It particularly highlights the cumbersome method in which bus funding is dispersed – this is split across 13 different grants, with different administration, conditions and timescales, increasing complexity and costs. The NAO report added that recent funding allocations have been largely short-term, limiting LTAs’ ability to invest in effective improvements.
The £2 bus fare cap in England also came in for criticism. “DfT’s £2 bus fare cap achieved its aims to make bus journeys more affordable for lower-income households and to increase bus usage,” the report noted. “However, the government repeatedly extended the end-date at short notice, making it difficult for bus operators to make commercial decisions.”
The report calls on the DfT to strengthen support for LTAs, particularly as responsibilities are increasingly devolved to local level. Financial and staffing constraints have left many authorities struggling to plan or deliver improvements, with 46% rating their own capacity to deliver local transport as “very or fairly poor.”
Government’s attempts to improve services have not always worked
“Bus travel should be an easy and reliable transport choice but government’s attempts to improve services have not always worked,” said Gareth Davies, head of the NAO. “DfT should work with local transport authorities and the bus sector to maximise the impact of the available resources in reversing the decline in bus usage.”
The NAO highlighted that while franchising could improve local control over routes and fares, the model remains complex and costly to adopt outside of mayoral authorities. In some cases it estimates the upfront investment can amount to up to £22m alongside ongoing operating costs.
Operators also face increasing financial pressure too with public funding now accounting for half of their revenue, while costs, particularly those for wages and fuel, have risen significantly since 2021.
The report recommends that DfT consolidate its funding streams, clearly articulate its long-term ambitions for the bus sector, and provide tailored support for LTAs to help them deliver improved services. This includes developing the embryonic Bus Centre of Excellence and setting out how the DfT will monitor and intervene in areas identified as underperforming.
While the government has committed to producing a national transport strategy later in 2025, the NAO warns that without stronger central coordination, the sector risks continued decline, with further service cuts and missed opportunities to support economic growth and social mobility.
Bus operators welcomed the report. Graham Vidler, chief executive of the Confederation of Passenger Transport, said that operators had worked in partnership with LTAs to deliver improvements. He pointed to towns and cities across Britain where commercial operators have delivered growth through
“Nevertheless, we agree with the NAO’s findings that worsening traffic congestion, the Covid-19 pandemic and a decline in public funding have damaged growth in bus travel over a longer period,” Vidler added.
“What’s crucial going forward is that public funding delivers the outcomes that matter to passengers. More buses to more destinations with quick, reliable journey times should be front and centre of investment plans.”
This article appears in the latest issue of Passenger Transport.
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