June 27 2025
The CPT’s chief executive Graham Vidler responds to the National Audit Office’s report on funding for the bus industry
The National Audit Office today published a report on funding for the bus industry which, although useful and constructive, paints a rather pessimistic picture of the commercial viability of bus services in England. While we welcome many of its findings, there are reasons to be positive about the health of the industry.
First of all, let’s take passenger numbers. Far from being in a ‘cycle of decline’ as certain headline writers have it, the number of bus journeys taken across Britain rose by 8% last year, including a 10% increase in bus travel across England outside London – the biggest increase for decades. Commuting patterns have changed since the COVID-19 pandemic. But with fewer younger people learning to drive, the long-term prospects for bus travel are promising.
In terms of funding, bus travel in England, as in every other European country, is paid for by a combination of passenger fares and by taxpayer support for services that are essential in connecting communities.
The mix has changed due to the Government's decision to subsidise passengers during a cost of living crisis through the English national bus fare cap. This funding, like the longstanding system of concessionary travel for older and disabled people, supports passengers rather than subsidising operators. It simply replaces fare income which operators would otherwise have received.
Taking this into account, almost three quarters (73%) of the industry's income comes from fares - or from passenger subsidies which replace that fare income. Which underlines the commercial viability of buses.
Investment in the bus industry is as strong as ever. In addition to responding to customer demand by laying on new routes and improved frequencies, bus operators are leading the way in introducing new vehicles.
Bus operators have invested £2 billion in low emission or zero emission vehicles over the last decade. For every pound invested by the taxpayer in electric or hydrogen fuel cell buses, bus companies are contributing £2.50.
The real issue being tackled in the NAO’s report is how well public investment in bus services is delivering in different parts of the country. The spending watchdog rightly highlights some stark differences between places and a lack of focus from central government on measuring outcomes.
It goes on to list some very welcome recommendations that will help to address this postcode lottery – including a clear strategy, long-term funding, monitoring of outcomes and action to be taken when outcomes aren't delivered. Operators fully support those measures to make sure that every penny spent on buses achieves the maximum value for passengers.