Trends in financial support for local bus services

Bus services can support a wide range of policy objectives that are important for health by increasing economic and social participation. In some regions, especially in rural areas and isolated communities, buses are the only means of public transport that can connect people with other areas.

Support from local and central government comes in five different forms:

• Net public transport support – direct payments for operators providing tendered or supported bus services.
• Concessionary travel – reimbursement to bus operators for statutory and discretionary concessionary fares.
• The Bus Service Operators Grant – a fuel duty rebate paid to bus operators
• The COVID-19 bus service support grant (CBSSG) and the Bus Recovery Grant (BRG) (counted in ‘additional funding to operators’) were set up to support commercial bus operators in England in recognition of the impacts of COVID-19 on their revenue due to reduced use.
• The fare cap – between 2023 and 2024 in England (outside of London) the government introduced a bus fare cap scheme of £2 for single bus tickets.

This chart shows the change in different elements of government funding for bus services.

• In England, government funding for bus services was £2.3 billion in 2019/20, 34.6% lower in real terms than its peak in 2008/09. Over this period, funding decreased across all three main categories: down by 47.3% for net public transport support, 11.5% for concessionary travel and 51.8% for the Bus Service Operating Grant.
• Between 2019/20 and 2020/21, funding increased by more than 100% to £4.7 billion. This included additional payments (BRG and CBSSG), introduced to support bus operators.
• In 2023/24, overall funding was around the same as the pre-pandemic level (£2.3 billion excluding fare cap funding), which is 33.5% lower in real terms compared with 2008/09 when funding was at its peak.
• The amount of spending varies across regions: in 2023/24, from a total £2.6 billion of government funding for bus services, £1 billion was spent in London, and £1.7 in the rest of England.
• In 2023/24, net public transport support was 3.8 times higher in London than in other metropolitan areas, and 4.3 times higher than in non-metropolitan areas. Spending on concessionary fares and the Bus Service Operators Grant was higher outside the capital.

Although bus services in London are operated under contract with Transport for London, bus services in the rest of Great Britain are operated by private companies that do not have a legal obligation to run loss-making services. Local authorities have an option to subsidise ‘socially necessary’ routes that would not otherwise be provided by private operators, due to weak profit incentives. Greater Manchester can now franchise bus services, allowing the Combined Authority to set fares, routes and timetables.

Funding for bus services increased to cover the shortfall in revenue caused by falling passenger numbers during the COVID-19 pandemic. 2022/23 and 2023/24 data suggest that funding has returned to pre-pandemic trends.