CPT Responds: £150 million funding boost for local bus services as fare cap set to be extended

• £150 million of redirected HS2 funding confirmed for next year to improve bus services across every part of the North and Midlands
• Funding is the first allocation of a £1 billion investment into bus services across the North and Midlands as part of the Network North Plan
• Comes as ‘Get Around for £2’ cost-of-living support scheme will be extended from 1 November

Every part of the Midlands and North of England is set to benefit from £150 million of new funding to improve bus services over the next financial year, the Transport Secretary has announced today (Monday 23 October).

This is the first tranche of £1 billion worth of new funding that the government is dedicating to bus services across the North and the Midlands as part of the Network North Plan - with further funding allocations to be announced in due course.

While it is up to local authorities in partnership with operators to decide how best to use the funding, the new funding for next year is enough to support up to 25 million miles of new bus services across the North and Midlands, helping local authorities provide more regular and reliable services or cheaper fares delivered through fare initiatives and ticket price caps.

The funding has only been made possible thanks to this government making the right long-term decisions for a brighter future. The reallocation of HS2 funding as part of Network North ensures that we can deliver our new £36 billion plan to improve the daily transport connections that matter most to people, benefitting more people, in more places, more quickly.

Prime Minister, Rishi Sunak said:

“Today’s announcement marks the start of the Network North plan coming into action.

“We’re backing buses with one of the biggest ever support packages and keeping bus fares down to ensure the country’s favourite means of transport is more affordable for millions of people.  

“This government is taking the right long-term decisions to deliver on our vision for a fairer and improved transport system by investing billions back into to the transport projects that matter most to people and their communities.

The £150 million from redirected HS2 funding is dedicated to levelling up bus services, with areas across the North and Midlands given extra support for services to become more frequent, more reliable, cheaper and easier to use.

Local authorities may use the additional funding to reintroduce evening services to support the night time economy, increase service frequency meaning less waiting time for passengers, introduce new routes to ensure areas previously unconnected are now connected or introduce a Demand Responsive Transport service to improve connectivity in rural areas.

This funding comes on top of the Government’s unprecedented investment of over £3.5 billion for the bus sector since March 2020 to support its recovery from the pandemic, drive improvements to local bus services and encourage more use of buses.

The “Get Around For £2” bus fare cap scheme will also be extended again to continue to help people save money. The cap had been due to rise to £2.50 but will instead remain at £2 and continue until 31 December 2024 thanks to the redirected HS2 funding behind the new Network North plan. This takes total Government investment to cap bus fares at £2 to nearly £600 million.

Transport Secretary, Mark Harper said:

“Buses are the most popular form of public transport, which is why we are continuing to back our buses with record high levels of funding – supporting vital bus services and offering affordable travel for passengers.

“This increase in funding to deliver more reliable, frequent and affordable local bus services – and to extend the £2 bus fare cap – has only been possible with the redirected HS2 funding secured by this government making the right long-term decisions for a brighter future.”

Since the £2 bus fare cap was introduced across the UK on 1 January 2023, millions of passengers have benefitted from lower fares. The Get Around for £2 scheme has helped cut bus fares in England outside London by 7.4% between June 2022 and June 2023, with savings even bigger in rural areas where fares have dropped by almost 11%.

According to initial analysis from a recent report published by the Department for Transport, the scheme has helped encourage people to get back on the bus, with almost half of respondents saying the fare cap is the main reason they are using the bus more.

Today also sees community services for older people and vulnerable passengers receive a 60% funding boost. These “lifesaver” services are vital for older and vulnerable people to get to the shops, medical appointments and see loved ones.

The funding increase, made through the Bus Service Operators Grant (BSOG), will help keep fares down and has been hailed by charities and vulnerable passengers who have difficulty using regular buses and rely on community services to get around and combat loneliness.

This boost comes as part of the Government’s nearly £260 million annual BSOG payments to support bus services in England outside of London. This also includes up to £213 million for commercial bus operators and, for the tenth year, £42 million for Local Authorities.

Chief Executive of the Community Transport Association, Victoria Armstrong, said:

“Community Transport plays a vital role in connecting people in our communities to health care appointments and social opportunities.

We welcome DfT’s announcement increasing the funding for Community Transport organisations and are pleased that the DfT has listened to the needs of the Community Transport sector and responded by increasing this essential funding."

Janette Bell, Managing Director at First Bus said:

‘‘At First Bus, we’re on a mission to get more people using the bus. Today’s news will help more people get on board with bus travel, bringing benefits to society, local economies and the planet.”

Alex Jensen, National Express CEO UK, Ireland and Germany said:

"Bus is by far the most popular form of public transport in the West Midlands so it is great to see this investment which will benefit bus users. More people using buses is good for the economy, environment and wider society. Bus travel is simple, cheap and easy and there’s never been a better time to get onboard.”

Notes to editors

• It is up to local authorities, in partnership with operators, to decide how best to use the funding. It is, for example, enough to support up to a maximum of 25 million miles (or 40 million kilometres) of bus services. This has been calculated using Annual Bus Statistics 2021/22. Calculating Tendered Mile per £ using 2021/22 Local Authority tendered miles and dividing by total gross costs for England Outside London. This has then been uplifted for inflation and divided by total funding of £150,000,000 for a estimate on how many miles this funding could support.
• BSOG Claims from 1 July 2023: For claims from 1 July 2023 to 31 March 2025, a 60% uplift will be applied to BSOG claims from Community Transport Operators operating services under a section 19 permit. For diesel, the payment rate will increase from 35 pence per litre to 56 pence per litre, so for every £1 claimed, operators will now receive £1.60. Operators do not need to apply for the uplift. It will be applied automatically.

BSIP Funding Allocations table for 2024/25

Funding breakdown

• Total allocations, funding profiles and the split of capital and revenue funding from 2025-26 onwards will be confirmed in due course
• A single allocation has been made to the Joint Transport Committee in the North East. Following the establishment of the new North East Mayoral Combined Authority, future funding will be allocated to the combined authority.
• Cumberland and Westmorland and Furness authorities came into existence on 1 April 2023, replacing Cumbria County Council.
• Following the establishment of the new York and North Yorkshire Mayoral Combined Authority, future funding will be allocated to the combined authority.
• Following the establishment of the new East Midlands Mayoral Combined Authority, future funding will be allocated to the combined authority.
• Funding is allocated to the current local transport authority for each area. Where further mayoral combined authorities are established, funding will instead be paid to the new combined authority. Totals may not sum due to rounding.