Pledge to Utilize Savings from Cancelled HS2 Phase 2
£150 Million Allocated for Northern and Midlands Transport Authorities
Buses, the backbone of public transport in the United Kingdom, are set to receive a substantial financial infusion to enhance their services. To strengthen the nation’s transportation system and narrow the urban-rural divide, the Prime Minister made a significant announcement on October 4, 2023.
Redirected HS2 Savings Fuel £1 Billion Bus Services Boost
From the savings realized by the cancellation of HS2 phase 2, the government has committed to allocate additional funds to improve bus services in the North and the Midlands. Today, it is with pleasure that we reveal the allocation of £150 million in new funding for local transport authorities in these regions during the upcoming financial year.
A Comprehensive Investment Strategy
This initial tranche of funding is part of a broader commitment of £1 billion to enhance bus services, with £770 million earmarked for the North and nearly £230 million for the Midlands. This allocation complements the £1.1 billion previously announced for Bus Service Improvement Plans (BSIPs) in 2022 and 2023, in addition to the £300 million dedicated to safeguarding and enhancing bus services through the Bus Service Operators Grant Plus (BSOG+) and Bus Service Improvement Plan plus (BSIP+) introduced in May.
Network North Plan: Strengthening Connections and Accessibility
The £150 million commitment stems from redirected HS2 funding and is an integral part of the government’s ambitious £36 billion Network North plan. This comprehensive strategy aims to expedite improvements in daily transport connections that have a direct impact on the lives of the populace, fostering accessibility and convenience across the nation.
Empowering Local Authorities
Importantly, these funds will go directly to local authorities, empowering them to collaborate with bus operators in designing the most efficient means to deliver improved services tailored to each area’s specific needs. This financial injection can fund the reinstatement of evening services to invigorate the night-time economy, the implementation of fare caps for increased affordability, the enhancement of service frequency to minimize passenger wait times, and the introduction of new routes connecting previously underserved areas. An estimated result of this £150 million is the facilitation of up to 25 million miles of new bus services.
Further details and expected allocations for next year’s funds will be disclosed today to individual local transport authorities, with additional announcements about the remaining part of the £1 billion bus services boost forthcoming.
Continued Support for Passengers
The government’s support for the bus sector and passengers extends beyond this initial allocation. The introduction of the £2 bus fare cap has played a pivotal role in stabilizing prices and supporting the bus market’s recovery. Initially launched for a three-month period, the scheme’s popularity led to its extension until October 31, 2023.
Following this, a £2.50 cap will take effect until November 2024, with a financial commitment of £335 million to sustain these fare caps, delivering savings for passengers and propelling economic growth.
In the past year, outside London, England witnessed a significant 7.4% drop in bus fares, whereas in Scotland, Wales, and London, where bus services have devolved, fares rose by 10.3%, 6.3%, and 6%, respectively.
Expanding the Fare Cap Nationwide
Building on the savings from the HS2 project, the government plans to extend the £2 fare cap across all of England until December 2024, representing a total commitment of nearly £600 million to cap bus fares. With more than 140 bus operators operating over 5,000 routes participating in the scheme, maintaining the fare cap at £2 ensures significant savings for passengers nationwide and aims to encourage greater bus ridership.
Supporting Community Transport
The government’s commitment to buses extends to community transport services, providing essential mobility for individuals who face difficulties using or accessing regular bus services or other public transportation. Funding support has been in place until June 2023 to sustain community transport operators during the COVID-19 pandemic, guaranteeing operators the same level of the Bus Service Operators Grant (BSOG) they received prior to the pandemic, irrespective of the services provided. This support empowered operators to sustain services they might have otherwise discontinued.
Today, the government announces its ongoing commitment to strengthening financial support for community transport operators. They will increase bus service operator grant claims by 60%, making this boost available for claims from July 1, 2023, through the end of March 2025, aligning it with the BSOG+ support scheme’s duration.
This enhanced funding is part of the government’s annual commitment of nearly £260 million to support bus services in England outside of London. Additionally, BSOG includes up to £213 million for commercial bus operators and, for the tenth consecutive year, £42 million for local authorities.
In combination, this comprehensive package of support represents one of the most significant investments in buses and bus users, reinforcing the backbone of public transportation with vital resources.