Bus operators to face funding gap, reduced services and higher fares, says new report

In a report for the Urban Transport Group, consultants Steer warn that bus operators are ‘extremely likely’ to respond to the absence of further funding by reducing service levels and increasing fares – as they have done in the past.

The UK government currently helps fund the public transport vehicles through the Bus Recovery Grant (BRG), which had been set up to support commercial bus operators in England due to the impacts on their revenue from reduced patronage, as a result of the pandemic. However, the BRG is set to expire at the end of March 2023.

The report highlights how the government’s own national strategy, published in March 2021, sought to return passenger numbers to pre-pandemic levels before growing them further. But it warns that ceasing financial support at the end of March 2023 would be a ‘severe setback’ for those ambitions.

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In the last quarter of 2022, bus patronage outside London was at around 85% of its pre-pandemic level, but there is no immediate prospect of patronage returning to 100%. While making the funding case for urban public transport, the report also explores the options for overhauling the ‘outdated system’ of local public transport funding more widely.

“As this report makes clear, the government risks further fracturing of the bus network if it stops backing the bus in March (2023),” said Jonathan Bray, Director of the Urban Transport Group. “The support that the government has provided for bus services during COVID and its aftermath has been both vital and welcome. However, we now need to move beyond short-term deals, funding cliff edges and waves of service cuts to a longer term and reformed revenue settlement for bus services outside London – one which makes the most of every pound of taxpayer support whilst also being capable of supporting the aspirations that the national bus strategy has rightly set out.”

Operators, represented by the Confederation of Passenger Transport, suggest that the end to financial support could lead to a 10-15% reduction in bus services across England. They also said that without further funding, government support for the bus next year would be over 20% lower (in real terms) than it was 10 years ago.