Welcome to this morning’s session of the Transport Select Committee. It is our first session of a series of sessions that we are going to have on buses connecting communities. We are doing this inquiry because many MPs from across the country in England, and all parties, have raised their concerns with me about bus services in their area. In many parts of England outside London and the centre of the major conurbations, bus passenger numbers and bus services are in decline. Many Members feel this is a very significant issue. In this session we will examine the current state of bus services with our first panel. In our second panel we will cover the impacts on people of poor bus connectivity, particularly in rural and suburban areas. Could I start by asking the first panel of witnesses to introduce themselves?

Good morning. I am Simon Mathieson, director of operational excellence at First Bus. First Bus is part of FirstGroup, one of the leading transport providers in the UK. We have over 13,000 employees in the UK. Our customers have about a million daily journeys with us.

I am Bobby Morton, the national officer for Unite the Union, passenger transport sector.

Good morning. I am Benn Simm. I am team manager for transport strategy and policy at Leicestershire County Council. Leicestershire County Council is the local transport authority for bus services and network across the county of Leicestershire. Our bus network equates to 6 million miles, of which 4.8 miles are commercial, and 1.2 miles are supported by the council.

Good morning. I am Andrew Summers. I am chief executive of Transport East. We are the sub-national transport body for Norfolk, Suffolk, Essex, Southend and Thurrock. We are an independent partnership of all 29 local authorities—five local transport authorities and 24 district authorities. We are the collective view of strategic transport. For the purpose of this inquiry, we are the rural centre of excellence for the east of England, so we are heavily interested in rural transport.

Excellent. Thank you all very much for coming today, and also for your submissions to our evidence. I am going to kick off and let you all answer, without, if possible, repeating what somebody else said. How would you describe the current state of bus services in England outside the major cities in 2025?

We would describe it as a very mixed picture. We see some really good examples where bus passengers benefit from improved services. I point towards Norfolk and Portsmouth in particular, where services have been improved through various funding regimes or local partnership approaches that have worked really well. Equally, we obviously recognise that there is a real need for some different answers for other communities that have not had some of those benefits, where services have been reduced or are declining for all kinds of reasons, which we might want to explore later. We would say that it is a very mixed picture.

You said the state of things outside London. They are in a precarious state at the moment. I actually use public transport quite often, mainly to support my members. We have the largest membership of bus drivers in Unite the Union. I very often find, particularly at weekends, that it is like a casino game, trying to guess what time buses will arrive. Quite often, again particularly at the weekend but also on weekdays as well, buses fail to arrive.

From Leicestershire County Council’s perspective it is challenging at the moment. We are a very rural county, focused around the city of Leicester. The city of Leicester has its own local transport authority, and all our bus routes operate in and out of the city on key radials. The key challenge for our communities is the cost of buses. Obviously, the cost can be quite a barrier for their ability to get access to employment, education opportunities and health facilities. With rural communities, we find that we are unable necessarily to provide a bus network that caters for them. If they are unable to drive, they become isolated from key facilities. There is a significant challenge for us as a county council at the moment to enable them to do that. That builds into requirements in terms of the bus network going to where people want to go and in delivering reliability in the maintenance and operation of the road network. They are some of the key challenges that we face at the moment as a county council.

In answer to your question about the state, zooming in on the east of England as a case study, it is a region of 3.5 million people with a million of those living in rural areas. In terms of passenger numbers over the last 10 years, there was a peak in 2014, but there has been a 14% reduction on 2014 levels to now. Overall, over 10 years, in the east there was a reduction, but over the last year there has been an increase as well: 77 million passengers in 2023 compared to 90 million in 2024. That is reflected in vehicle miles. As one of the other speakers said, there is variation across the region. Some of our local authorities have reported services being cut, for example in Thurrock, or reduced frequencies in Suffolk. Where there has been investment—for example, through the BSIP funding in Norfolk—there have been noticeable improvements as a result of that targeted investment. There is a mixed picture for a variety of reasons. The data says there is a long-term decline from 2014, but over the last year or so there has been an increase as a result of some of those factors.

Thank you. That is where we are now. As you have just said, Andrew, we have had a long-term decline of a billion passenger journeys since 2009 and, since 2021, a 23% cut in services. Starting with Andrew, what does each of you think is the major cause of those declining trends?

From our local authority’s perspective, there are two factors: the demand side and the supply side. On the demand side, it is very much around the macro environmental factors that are at play in the wider economy environment. Just picking out some of the key ones over the last few years in particular, there is the change in working patterns: for example, hybrid working in the east; 38% of people can now work from home in the Transport East area. Our local authorities are therefore reporting that Mondays and Fridays in particular are challenging for public transport to make ends meet. We are competing against increased car usage as well over that period of time. Car mileage trends in the east are pretty much back at 2019 levels pre-covid. Car levels have increased, but bus levels have not caught up. There is therefore a competitive advantage that cars have. One of the other major macro factors is the planning system. A lot of our councillors identify challenges around building origins and destinations in locations that do not cater for public transport use but favour car use. The continuation of that over decades has created an environment where it is unprofitable for public transport. There are a lot of demand-side factors in the macro environment. On the supply side, there are real challenges as well, as others have mentioned, around the financial sustainability of buses. We will probably come on to this in later questions, but local authorities have all said that funding uncertainty and the lack of long-term certainty of investment holds back the environment for buses to flourish. There is the siloed approach to bus investment as well. One of the things that we, as Transport East, have always advocated are integrated settlements for transport, giving local authorities the ability to have more of a portfolio approach to delivering transport through investment. The siloed, short-term approach to bus funding over the last few years has acted against that. In summary, the demand side and the supply side are both acting together to create this environment.

Ben?

For us, as I have already said, one of the key challenges is the cost. Building on reliability, the bus network for Leicestershire does not necessarily go where people want to go. A lot of our communities have to interchange in the middle of Leicester. That makes the journey time much longer compared with car use, and then car use becomes more favoured. The work we are doing at Leicestershire County Council is trying to look at where the origin destination elements are and where people want to go, and then to try to build a bus network that does that. We are looking at hub and spokes because the old way of looking at key radials in and out of urban centres is not necessarily what people want any more. Thinking about Andrew’s comments about development, that has spread out. We have a lot of destinations now. For example, Fosse Park in Leicestershire is on the edge of Leicester city but actually sits in Blaby in Leicestershire. It sits next to junction 21 of the M1 and is a major retail park that services Leicestershire. Junction 21 of the M1 is regularly congested, which then impacts the local road network. The buses get caught up in that, which then undermines the reliability of the bus service and there is increased delay. For us, it is about the bus network being a reliable alternative to the car. That is one of the key challenges we are trying to factor in, as well as dealing with developers who approach us saying, “We’ll provide a public transport offer by amending this bus service.” The bus service currently operates on a 30-minute frequency, for example, but that could push it up to 45 minutes or an hour. Then it meanders around different areas and does not serve the purpose for which it was originally created.

Robert, do you have anything to add?

One of the biggest challenges that we have is the shortage of bus drivers.

We have some questions on that, so we will come on to that.

Sorry. Can you repeat the question?

Can we come back to the whole issue of bus drivers later in the questions?

Yes, but I want to reply to the question that you have just asked. Can you remind me what the question was, please?

What are the main factors for the decline in services and passenger numbers since 2009, and the even quicker decline since 2021?

I have already described the problems that I have as a passenger—I won’t go through them again—but there are other problems as well. The fares were increased hand over fist, if you’ll pardon the expression. It was only when the cap on the fares came in that people returned as passengers to the bus service. Once again, that dropped when the cap became £3. That cap ends in December. We all wonder what will happen in December. If it goes up again, there will be a further dilution of the passengers who take the bus to work, and it just won’t happen. That is a major problem as we see it.

I certainly support a lot of what Andrew said, so I don’t want to repeat that. From our point of view, there are probably two elements to add. One is the impact of congestion and what we have seen in the slowing down of bus services. Every hour we run, a bus costs us about £60. Just looking at it from a purely financial point of view, which, ultimately, we have to do, every time we try to extend a journey, or it takes 10 minutes longer to get in and out of a place or to a village, it increases the cost by £60 an hour. That is quite a lot of revenue to try to collect in that hour to make up for those costs. The congestion impact is definitely there. In Hampshire, for example, a 25% journey improvement has given us a 60% passenger increase in the first year on the Eclipse service between Fareham and Gosport. It can be done in terms of solving congestion. The other point, particularly since 2021, is that we still have not seen the full recovery of patronage for concessionary travel. People who have concessionary passes tend to be the older generation. They were very put off travelling by bus, in particular during covid, for all kinds of good reasons. The messaging around that really hit home with them. They have not returned in the same level of numbers that we have seen the non-concessionary passengers coming back. There is something still to be done about further encouragement for concessionary passholders to travel on the bus and feel that it is a safe thing to do.

I suppose there is a circular link between people having less confidence in the reliability of buses, and then marginal car users going to the car more creates more congestion in cities like Leicester. Thank you.

When asked about the state of bus services, you used words like mixed, precarious, challenging and long-term decline. The 2021 national bus strategy aimed to reverse bus service decline and increase patronage. How would you judge its success?

At the risk of repeating myself, I would say mixed again. Some of the results have not necessarily been tied to the most obvious allocations of funding. I don’t think Leicester city got anything particularly in BSIP funding, or certainly not in the early tranches, but still managed through the partnership approach that we and the other operators in Leicester have had to provide a more holistic bus network where we have seen patronage grow. Equally, we have seen areas where perhaps some of the funding or the intent did not quite work or was not aiming quite at the right thing. My answer would be “mixed”. The answer around what we could do better about that going forward is to have much better and closer working in partnership between operators and local authorities, in whatever regulatory model that might be. It is joint and partnership working that will lead to success.

It is difficult not to go into what I said before about the number of drivers. I will try to skate around that. I thought the 2021 Act was a good Act. The only problem is that it was not delivered the way it was supposed to be. There are all kinds of different reasons for that. It would take all morning for me to go into the reasons. If the Act had been acted on the way it was supposed to have been, we might not be sitting here today. The Act failed deliberately. As I say, I am repeating myself now for all kinds of different reasons.

Rather than taking all morning, though, if you had a headline as to why it was not delivered in the way it was supposed to be, would you be able to give an indication as to some of the reasons why that happened, or what we saw happen?

Again, at the risk of repeating myself, there is a massive shortage of bus drivers. It has not been taken care of and has not been addressed whatsoever. The latest figure we have is that there are 4,000 bus drivers short nationally in the industry. Until that problem is fixed, the unions collectively, and the operators, cannot negotiate the 2021 Act. It will come up constantly, I’m afraid, when I am talking because it is something I face every day: “Why isn’t the bus turning up?” On a Saturday and Sunday where I live, I ask myself the same question. I become incredibly frustrated when the bus does not turn up. I am incredibly frustrated because I know why the bus isn’t turning up: because there is no driver to drive it to my bus stop.

Thank you.

As a county council, one of the key challenges we face is funding. That is well recognised. In terms of delivering a bus network, at the moment we are still in a phase of having annual settlements around funding for bus provision. That enables us to plan for the long term and develop a bus network which we can actually sustain and deliver for our communities. If we had multi-year funding settlements, we could plan for the long term and make sure that we can deliver bus services to support our rural communities and can deliver them over that timescale. At the moment we are working within the BSIP and that strategy, but we need certainty around the funding for us to be able to enact some of the ambitions and objectives we have for the county council.

Last year, we at Transport East and our neighbouring sub-national transport bodies—Transport for the South East and England’s Economic Heartland—brought together all 30 chairs of enhanced partnerships across the wider south-east of England for a day’s session to tackle the very question that you have just asked. We reflected on the last couple of years since the introduction of the 2021 strategy. There were good and bad issues and lessons learnt. In terms of the good things, areas that got funding—for example, Norfolk—saw demonstrable increases in patronage and passenger satisfaction. Norfolk got roughly £50 million of BSIP funding around 2021. As a result, they saw an increase of 16% in patronage on those routes. It worked where the funding worked well. The other thing that our local authorities said is that it raised the profile of buses among local politicians. Local politicians are fundamental for driving forward buses in their local areas. It also developed a policy framework and partnerships with operators, which often was not there before. That strengthened the relationship and provided a framework for working together going forwards. In terms of the areas that were less well received by our local authorities, the bidding process was seen as very onerous and very painful. On average local authorities spend about 30 k per bid to Government when they have to go through those processes. That was seen as a wasted cost, when the money could just have been allocated. Four out of five of our enhanced partnerships did not receive funding in the first round, so it was seen as largely a wasted effort on their part. Some of the rules about the application process for the BSIPs changed, so the emphasis went from accessibility to requiring bus priority measures. That leads to some issues around policy and delivery challenges that do not quite meet. Our local authorities said that they often do not have the capacity and capability in-house to be able to deliver bids quickly. Some of the demands of the BSIP funding were big capital schemes, such as bus priority, but they did not have them ready to go. When the bids were assessed, those that did not have bus priority schemes were not accepted, despite the fact that they did not have the capacity or capability in-house to have developed them over the last couple of years. There are some real challenges that others have pointed out. There are good bits of practice. The bidding process did not work. Supporting the capacity and capability of local authorities is going to be fundamental as we go forward with this process.

I have a two-part follow-up question. Part of the aim of the 2021 strategy was to encourage a move from cars to buses to support net zero goals and improve air quality. Has that shift happened? I think I might know the answer to that. Where would interventions be best focused to encourage modal shift?

I guess you have to look at the supply and the demand side. In the east the car dominates, because it is much easier to drive to places than the ability to fund bus services. What we have seen in Norfolk is that where you can improve accessibility by passenger transport it generally works. The key is an integrated package of measures. This is a siloed approach today, looking at buses, but actually that is part of an integrated package that is required across local authorities. The DFT’s integrated national transport strategy, which the Secretary of State is pushing forward, is a good way to start to join up the siloed thinking that takes place. To give an example, previously I worked at Transport for London, and one of the really good examples there was the Healthy Streets portfolio that was brought in. It brought together different funding streams that were modally isolated into one portfolio package, with a long-term funding envelope and clarity on the outcomes that we were trying to achieve. If we can move towards integration and away from silos, based on wider outcomes, it would go a long way to tackling the problem.

For us, at Leicestershire County Council, we have taken the step to publish our annual local transport plan. We have written a new local transport plan, and we took the decision to do that before the publication of the local transport plan guidance by the Department for Transport. That is partly because our old local transport plan was coming to the end of its life in 2026, but we have significant challenges that we need to tackle across Leicestershire. We have the fastest growing population across the east midlands, but also across England. We have a rapidly ageing population. By 2043, the majority of our population will be aged 65 and over, so will be more reliant on the bus network and bus services. We have to find at least an additional 120,000 homes across the county. That was before the recent announcement on housing delivery from the Ministry of Housing, Communities and Local Government. We have significant challenges in doing that. We see our local transport plan and buses as one piece of a jigsaw for a bigger solution, which is multimodal integrated transport. We have built a policy strategy that sets out our core vision and our core themes, but brings in enabling health and wellbeing, protecting the environment, delivering a resilient transport network and delivering economic growth and embracing innovation. The bus network is part of that. How we will deliver on the local transport plan is through something called multimodal area investment plans, where we look at an integrated approach to transport and multimodal transport solutions to deliver what communities in those areas need, because we are going to break them down into areas. That might be more bus priority, more bus focus, or protecting bus services in rural communities. It enables us to have the flexibility in transport policy in implementation terms to deliver what our community needs. We have taken the approach as a county council to start putting in the policy foundations and strategy blocks to enable us to be flexible and to utilise our funding to the maximum. The bus network is a key element of that for us.

Crucially, as far as Unite is concerned, we need a sustainable method of funding for the bus sector, which does not apply at the moment. Although we are talking about outside London, within London, as Mr Summers indicated, Transport for London has just lately become a tremendous success for the operators, for the City of London and for the bus drivers as well. If we copied that nationally, it would bring in £340 million, which then could be put back into the industry to bring us sustainable funding, as I said before. Again, I am sorry to keep going back to last week when I got on a bus, but it is happening a lot just lately. I find that things are being missed out. These are things that people notice. On the bus that I got on at the weekend, at midday when there was a little bit of sunshine, I couldn’t see out of the windows because they had not been washed for quite a long period. The same thing happened when I got the bus back. If the money was used properly instead of being funnelled off in profit to shareholders, and we used it on the buses themselves, we would get the sustainable funding model that I mentioned.

Simon, do you have anything to add?

In terms of modal shift we have to try to find the balance between deterring car use and making the bus really attractive. The best way to make the bus really attractive is a longer-term, multi-year funding package for local authorities that enables a commitment to infrastructure. We know that bus users value journey reliability and journey times far higher than price or anything. If they know it is going to be reliable and is going to get them where they want to go, they will use the bus. For me, it is finding the right level of carrot and stick but also looking at where it has been successful. We have all mentioned a couple of places already where there is good practice and we have delivered patronage growth, mostly in partnership. If we can harness that and expand it to other areas, we have a chance of being successful.

Thank you for those answers. They have been quite broad and cover the breadth of the issues. Now, we need to pin down some specifics. Could I ask that you keep answers short? If there is nothing to add, you don’t have to answer. I want to get through all our questions before the next panel comes on.

The Government said that they intend to repeal the ban in the 2017 Act on local authorities creating new companies for the purpose of providing bus services. Do you think that lifting the ban on new municipal operators will have an impact in non-metropolitan areas?

I will start from a Leicestershire County Council view. It presents a lot of opportunities but also risks. On the impact on non-urban authorities, it could be seen that the operating costs could be higher in a market that is not large enough in entity. Leicestershire’s bus network is not really large enough to support itself. We would have to work with neighbouring authorities. That is not just the city but neighbouring county authorities as well because some of our bus services run to Coventry, Rugby and Northampton. There might be a much more significant operating cost compared to the commercial operation that we have at present. It could limit innovation and efficiencies if it is not done well and we do not have the ability to recruit the best people. There is then the reputational risk on the local authorities in terms of who owns it and how well they provide the service. As I say, there are significant opportunities. It could help to counteract some of the monopolies that we have in areas where there is limited commercial interest, and offer better value for money for our communities, which is quite important. We want to get the best deal for our communities. It could also bring in skills to the local authority company from the industry, which will in itself bring in innovation and perhaps new ways of working for our operation as local authorities. We see at the moment a number of opportunities but also a number of risks. We look forward to seeing more detail if it was to come forward.

No matter what the set-up and who has control of bus services, for me it is more about the challenges remaining the same. A municipal bus company is still going to have the challenge of the funding settlement, the congestion and the land use planning aspect. There are all kinds of different models, and we are happy to work in partnership with lots of people. Trying to address those challenges is more important, necessarily, than who owns or runs the buses, I suspect.

Again going back to the profits that are made, they are usually given to shareholders. If we have the local council running the bus services—we have nine operations left that are owned by the council—I champion them. I have always described them as wonderful companies because usually, unless they are badly managed, there is a profit to be made, which makes the local council happy. The wages are always good. The terms and conditions are always good, which makes the drivers very happy. They also seem to have the best record for pleasing passengers, which makes the passengers happy. You have a model there which has been adopted by London and which works. It has been proved to work. I am absolutely delighted that the ban has been lifted.

To quote some excellent work that our neighbouring sub-national transport body, England’s Economic Heartland, has done with SYSTRA on bus models in regions such as ours, their view on municipal bus companies is that there are pros. For example, it helps to achieve the integrated approach from a local authority control perspective, and it allows for a long-term view. One of the key cons or risks is around the high cost to the local authorities. As others have said, it does not remove the risk to the local authorities. For local authorities in our area to take it on, it is the revenue risk bit that they are currently struggling to get past. I hope that was a quick answer.

Robert was making a point earlier about municipal ownership. I am from Edinburgh. It is not in England, but we have a municipal bus company there. As Robert alludes to, the drivers are well paid. It is a highly unionised workforce. I think it is over 90%. The buses are clean, which is a point you made as well, Robert, and is really important. Simon, I will get to my question now after flattering Robert a little bit. You said that you did not see ownership as the issue. The observation I would make about Edinburgh—I was a councillor there for a few years—is that, because it is a municipal owner, they did not just look for profitable routes. What they did was to run a network as a whole. There were some routes that perhaps a commercial operator would not be interested in, but because they were running a network with different routes connected, and people would sometimes take more than one bus to get from A to B, that really worked. Do you think that would be a benefit of municipal ownership, or do you think that is already happening with the kind of model we have now?

We very much hope to be running networks in the places we have, but the deregulated model outside London means that we have to run bus services legally that make money. We are not really allowed to cross-subsidise or run loss-making routes. Sometimes there are genuine reasons for doing that to support a network, but the way that the 1985 Transport Act set it up was that private bus companies are there to run profitable routes because we do not want to distort the market. It is therefore the duty, although not a statutory duty, of local authorities to step in, provide and fund services that are not provided in a commercial way. I suspect that, because it is not a statutory requirement on local authorities, some authorities take a different view on supporting services that may not otherwise be commercially run. We want as many people to travel on buses as possible. It is in our interests to do that, but we also need to work within the rules we have.

Simon, can you say a little bit more about not being able to run loss-making routes at all, or having a very limited amount of cross-subsidy? Is that just within your own operation and not in the context of a wider bus network?

In the way that it was set up in the 1985 Transport Act for deregulated bus outside London, we are not allowed to distort the market by running services that are loss-making because it might prevent entry to the market, or it might mean that it is anti-competitive in some way. There is a duty on us to run routes that are profitable. Sometimes we might take a more nuanced view about how we set that up. You might say, “Actually, this route feeds into all these other routes. Therefore, as a network and an operation, we understand that we’re meeting our requirement to be profitable.” The requirement was set out that, therefore, it was for the local authority to step in when routes needed to be provided that were not otherwise provided. That has been interpreted by different authorities over many years in different ways. Some authorities have been very generous, and some authorities—Cumbria is an example—basically did not run any supported services for about 10 years or so. They do a little bit now.

Subsequent legislation and policy does not trump that fundamental underlying, and it is basically now different authorities have interpreted that and worked with the private sector to even out the difference.

Yes.

The concern that I have had on some routes is that even when a route was very popular, if it was popular with those on concessionary fares or not having to pay, or with students and young families, it might not be commercially profitable even though the social value of the route was very high. Do you feel at the moment that the rules under which you operate are detrimental in prioritising profit over social value?

I don’t know if I would say, or agree, that it is the rule that we operate under, but the rules under which the industry is operating would be interesting to look at. As far as I understand it, there has never been a clear definition in the Act of 1985 of what “socially necessary” means. As I said before, it has certainly not been made a statutory requirement. Some authorities have tried to fund a bus network, and some authorities have taken a very different view on that. As funding has got tighter over time there are obviously difficult decisions to be made. It is not necessarily about the rules we operate under but how the industry is structured, I guess.

Picking up on that last point, Ministers have said that they intend to include a measure on socially necessary bus services in the forthcoming Bill. How do you think socially necessary should be defined? I would also be interested if the witnesses have a view on who should make the decision under the forthcoming legislation on which services are socially necessary.

The two words that were used earlier were “commercially run”. If I convert that into my language, that means “Unless I can make money out of you as a passenger, I’m not really interested.” That brings me to people who live in urban areas, for instance. Just lately we see that all of the banks in the big cities are closing different branches and so on. That means that people who live in the urban areas have to move. They do not have banks. They have to move into the big cities in order to withdraw their wages. There are all kinds of reasons why they are being forced into cities, but those same people do not have a socially viable bus service that will take them along because there is no profit in the bus services that are being applied. They are the people who need looking after most of all. If there is no bus, what do you do? You take the car. If you are on low wages and you do not have a car, you are stuck there. You cannot go in a taxi because you don’t have the money to do it.

Can I come in on that question? My view is that you have to focus on the problem you are trying to solve and the outcomes you are trying to deliver and use data and evidence to identify what are socially valuable services. From our perspective in Transport East, we have done a lot of work with our partner, Transport for the North, on transport-related social exclusion. We have done an analysis across the whole of the east of England and identified that 25% of people in the east live in areas where there is transport-related social exclusion. To the point earlier about young people, we have done a survey to home in on young people and the challenges that they face. We surveyed 1,000 young people late last year and looked particularly at buses. They were young people aged 16 to 20, so those in higher education. They identified that they have long travel times; 32% of them said it took one to two hours to get to educational training; over 60% of them were paying £30 a week to get to college; and two thirds of them were not arriving on time, missing lessons because of the paucity of the public transport network. If you will indulge me a little bit, we took a lot of quotes from people. One quote that stood out was, “My grandad retired to take me to college as my mum is disabled and my dad works full time.” What we are really getting into is that there is data and evidence around social exclusion that we can start to use as measures to be able to analyse it. Our view is that you can use evidence such as that to be able to create benchmarks to identify where are the socially excluded routes that we need to tackle. You use that evidence base to identify that, focused on the outcomes for society that we are trying to address.

Obviously, through the work we have done on our LTP4 we have a lot of similar comments from our community that link to Andrew’s about the cost of people trying to get to educational opportunities and health facilities. One of the stories I heard through LTP4 was about a girl who has autism. She uses a bus to get to college, but if the bus gets too full she has to get off and wait for the next bus to get on. She might do that repeatedly, and one day it cost her £12 to get to college. There are huge challenges. It comes down to the ethos that passenger transport is really a public service. We are delivering a public service for people. Perhaps we have lost that perspective over time and we need to re-establish it. In doing so, we need to understand that while each area has its own needs and requirements for the bus network—Leicestershire’s needs will be very different from Birmingham’s or the south or London—there needs to be a clear national understanding of why passenger transport is so important and the role it needs to play in supporting and enabling our communities to live their daily lives. That is the key bit that needs to come forward at national level. It is across all levels to take ownership of it in making sure that we deliver the services that our communities require.

To refine the question a bit, do you think it is possible to define socially necessary in the legislation itself, or do you think we are going to be left with a similar situation today? Perhaps we will have guidance, but it will not be defined in primary or secondary legislation.

There needs to be some level of definition, especially where, for example in Leicestershire, there are rural communities that often have a significant level of deprivation themselves or an ageing population who cannot rely on using a car or cannot use a car. There needs to be a level of definition around that in terms of what constitutes an essential service at national level within the legislation.

To expand on that, articulation of the outcome would be helpful but there needs to be some degree of flexibility for the local area to be able to define it. As we go through devolution as well, and more mayoral strategic authorities come on board, it could be giving them a little bit of flexibility to define that based on the data for their area, but I agree that an outcome at national level would be really helpful.

For young people, as a Committee I think we should look at the under-21 free bus travel in Scotland. It has not been without its problems, but for some people it has been transformative. On to my questions. We spoke broadly about what has been behind the decline in bus services across England. We know the specific issues on rural routes and connecting services. Very briefly, looking at rural routes, what has been behind the decline in services? Our notes tell us that one in four services has disappeared since 2010. That seems absolutely incredible to me. What has been behind that, very briefly?

From our perspective in Leicestershire County Council, it is the commercial viability of those services in terms of the patronage numbers versus the cost to actually operate the services. It can be challenging because you have to operate a level of service for people to be able to get to the facilities that they need, but they do not necessarily need that bus service all the time, every day. It is finding a balance in delivering the service. The other challenge is that, often, we have had to extend bus routes, or consider extending bus routes, that perhaps serve an urban area where they get more customers as they head in towards the city, but then they are undermined by reliability because they also get caught in the congestion of that area. Therefore, there isn’t a reliable service out to that rural community.

They would be more infrequent as well, so missing your bus is a huge issue.

Yes. We are now having to look at other options for our bus network and for our demand-responsive transport. We have done the FoxConnect trial in Leicestershire to see how that works. The trial seems to be quite successful. We have to think innovatively and outside the box to see what level of service we can provide for our rural communities that is cost-effective for us as a council. Generally, we will have to subsidise those routes. When they become commercially unviable, we usually have to step in to subsidise them but that is becoming increasingly challenging. Our ability to do that is challenging due to the financial situation in our funding coming forward.

Does anybody want to add to that?

There is some evidence from a travel behaviour survey that we completed last year. We surveyed 4,000 people across the east of England to understand their travel habits. Rural buses were a key thing. There was a clear disparity between rural and urban. Overall, 46% of people had access to a bus, but only 30% in rural areas; 30% of people had used a bus, but only 14% had used it in rural areas. The top four things that they said were challenges were around infrequent services and limited early and evening services. That was seen as a real barrier to people using buses. You cannot get back from, say, night-time employment even though you could get there.

That is especially an issue for young people, who tend to work then.

Exactly, yes. The other challenges were no direct routes and taking too long to get to destinations. As others have said, a lot of the reason behind that is the financial viability of providing it across a sparser population. For example, Suffolk has 240 commercial bus routes across its network. All of them require some form of public subsidy and 40 of them are fully funded through subsidy. Viability is really difficult across those rural areas, resulting in those symptoms, as I have just said.

And at a huge cost for that number of routes.

Yes.

Anybody else?

The question has been answered a number of times this morning. They are not profitable routes and they are abandoned by the operators. They are just not profitable. I don’t want anyone to think that I am against profit; it can be a good thing for all parties represented here today, but I would like to see more money poured back into the industry rather than it going out to the shareholders. One of the great things that concerns me lately, where I am jointly heading up a situation in Unite, is that we have what we call the “Get Me Home Safely” campaign, which is basically looking after the safety of women on the streets. It has been described by an MP lately that the number of attacks on women on the streets has now become a national emergency because it happens that often, both in daylight and at night-time as well. If a bus is coming along on a regular basis, it can be a help to women who may be in trouble. That is something we are working on, but if it does not make profit we do not get those routes. However, if the money is poured into it instead of going to the shareholders, we have a bigger chance of doing it.

We have to remember that it is called a bus service; it is a service, not always a commercial operation, hopefully. Is there anything we can do to protect and extend the routes that are still left? Are there any specific issues, apart from the greater levels of subsidy that have already been mentioned? Ben, you spoke about DRT. Is there anything else that people want to add to that on how to protect things going forward?

In terms of the Green Book, investment in rural areas is generally always seen to have a poor return of money—in terms of providing that investment or that service—but the social benefits outweigh the actual financial benefits or the financial potential cost of providing a rural service. There needs to be an element of reviewing or consideration of the Green Book to provide greater emphasis on social aspects and environmental benefits. Obviously, a bus network and bus service can reduce car usage and is better for the environment. At the moment it isn’t there, so I think that would help as well. That would give a greater benefit weighting for putting investment into rural bus services.

That is a key point, because we are talking about younger people and older people finding it harder to access bus services. The cost of that in the longer term is huge in terms of social isolation and obviously access to work and education, so it is really important. Are there any specific types of services—I think we have covered this—either connecting destinations or services to people, that we should be more concerned about in rural areas? I think you spoke about services that would only be used occasionally, perhaps for healthcare, which are essential when you need them, but you are not using them every day. Is there anything else?

One of the interesting points, and probably one of the more successful provisions of rural transport for many years now, has been the community transport network. Some of that community transport element has relied a lot on volunteers, some of whom may stop doing it for age reasons or whatever. Community transport probably sometimes has a bit of an image issue as to whether it would be attractive for a younger person to use, because it is perceived to be for a certain demographic. There have obviously been other attempts with DRT, which have been mentioned already. Community transport as a feeder to trunk bus routes or connecting to the edge of an urban area, to connect with bus routes, still feels like part of the answer for an integrated transport solution. Community transport has never gone away. As I said, it has been quite successful in the past. Perhaps community transport would be something that could be considered further.

Of course, it is really important. Let’s look at the rebranding of DRT to make it more interesting and more exciting for younger people. Let’s hope. Thank you, Chair.

The Government’s new buses Bill says that it aims to “empower local authorities to improve their bus services”. Can you explain what you think empowerment should look like, and how local authorities can be best supported to do that?

From our conversations that we have had in the east, it is very much around what type of model could be better than what we have already, which is where the franchising question starts to come in quite a lot. It is very much around a lot of analysis that has taken place. For example, just outside our patch, the Cambridgeshire and Peterborough Combined Authority have done some analysis comparing the enhanced partnership model that a lot of our authorities have at the minute to the franchising model. They have started to look at where the advantages could be. Overall, the strategic and economic case was broadly similar. The financial and procurement case that is on offer through the latest legislation was seen as the key risk that a lot of our local authorities feel they cannot take at the minute. The opportunity may come through alignment with devolution. A really interesting situation in the east of England is that all of our local authorities will be going through devolution over the next year or so. In May next year we will have mayoral elections for Norfolk, Suffolk and Greater Essex. That is where some interesting conversations can take place. Does that scale start to allow more franchising, or start to move towards that type of model, than can currently be taken under the restraints of the existing system? One of the key things aligned to that will be the integrated transport settlements that mayoral authorities will have. That will start to crack some of the questions and problems that we have already talked about in terms of long-term funding. It feels that there is a package of both the measures that are in the latest legislation plus other things that are happening as well, that collectively could happen. I go back to the point that this is not in isolation. There is a package of things that the Government are doing. The other opportunity is in the planning and infrastructure Bill, particularly around the opportunities to align planning with bus service provision. Mayors will be responsible for spatial development strategies that bring together transport and planning in one place. We are starting to see that there are tools available through the Act, and combining those with the other tools available through other legislation you start to get the whole systems package that I think is going to be needed to deliver this. It is not a single thing; it is a systems approach.

Assuming that the empowerment comes with the right funding approach, I very much hope that empowerment looks very much like locally led partnership working. Bus services are best delivered when they are delivered in local partnership. It empowers those authorities to invest in the infrastructure that helps improve bus journey times and reliability. They can be empowered to look at measures to deter car use and encourage modal shift. It will also help them be empowered to look at some of the skills gap that we have seen emerge in local authority transport teams in more recent times. That would be how I hope they would empower themselves.

From my perspective, I agree with a lot of what Andrew said. The key opportunity for us will be through the opportunities that come through devolution and local government reorganisation. As I said, in Leicestershire we cannot sustain a bus network on franchising alone. We would need to go with other parties. Through devolution there is potential for cross-boundary franchising with other key geographical areas. It is not just the wider Leicestershire area with the city and Rutland, but wider with other neighbouring authorities.

The vast majority of local authorities get subsidies, but they do not seem to understand what they are supposed to do with them. In this case they should be supporting the bus sector, but that does not happen. Once again, it comes down to sustainable funding where money is available. Not so long ago this Government made available something like £3.5 billion towards the industry, of which £1.5 billion has been spent. That means that somewhere along the line some bank account has £1.5 billion lying there, probably gathering interest. That money should actually be spent on the sector instead of lying in a bank vault.

I somehow doubt it is in a bank vault—Rachel Reeves would have found it. Andrew, you were talking about the potential for franchising using the example of Cambridgeshire and Peterborough. When you read the Cambridgeshire and Peterborough business case, actually the overall level of subsidy remains identical throughout the entire period that they are talking about. Many people on the panel have basically been saying, “It’s about money.” Can we hone down more? Is it about money or about powers and responsibilities? What is devolution bringing that we do not have at the moment with an enhanced partnership, for example?

It is for the customer themselves and the integration with other modes and the wider transport system. Yes, it is absolutely right that the money is the same in both. What devolution of powers, both for buses and other transport functions, enables is a better customer approach. I guess that TfL is the gold standard example, but if you look at Transport for Cornwall, they have been able to develop one Cornwall brand. All the Cornwall buses and all the travel information is under that very easy-to-use, customer-focused experience. That then starts to bring together and integrate transport in place. The other thing that the Mayors are able to do is start to align buses with other modes of transport, planning for them as well. As a micro-example of a transport corridor, through the current funding process a local authority would look at a bus lane on its own. What this starts to bring together is a total streets approach, where they could look at all the different modes on a corridor at the same time, really allowing integrated provision. That could start to overcome some of the community opposition to bus lanes. There is an opportunity through integration with other modes and the powers that Mayors will have, which they do not have at the minute, and single political direction and leadership. In areas with Mayors, we have seen that has been really important in driving things through. Making difficult decisions could be easier under the mayoral body.

This question is to anybody. Are there any aspects over which you think central Government should retain control?

Although we would support the general approach to devolution, we would very much like things such as BSOG payments to be kept as they are. From a central Government point of view, it would be a clearer steer, even making it a requirement to provide socially necessary services—the definition aside. A requirement to do that would be very important and a central Government role.

I want to ask Ben and/or Andrew a question about this brave new world with devolution of powers, more joined-up thinking and using opportunities that previous legislation or policy did not allow. Does local government in its different facets have the skills and officer capacity to do that stuff, and to do it well? If not, what needs to be done?

One of the main things our local authorities have said to us is no. A lot of local authorities do not have that capacity and capability. I guess the short-term funding process to date has not allowed long-term procurement and recruitment. A lot of our local authorities have said that a lot of the skills lie in people who are going to retire relatively soon. I guess that the younger generation of bus planners is not necessarily coming through at the scale we would need in places like the east to drive this forward. Some of the large metropolitan areas have very large teams of the people needed to do that—for example, Transport for London and Transport for Greater Manchester. That capacity and capability is not in places like the east of England at the minute and that would need to be addressed.

Given where your regions and sub-regions are on this journey, in a different place from the big mets, do you have any advice for Government, or recommendations you would make on the issue of officer capacity?

From Leicestershire County Council’s perspective, multi-year funding is crucial for us to be able to plan long term and plan for those changes and investments. At the moment, we are working on annual settlements, which mean that we have to be very reactive in the funding we get to try to make decisions very quickly.

Does that impact on staffing? I am focusing in particular on the skills involved in doing this.

It does impact on staffing. We will not necessarily have the capability or capacity in-house to deliver a large programme of funding if we receive it. We have to scale up or down very quickly, whereas a long-term funding settlement enables us to manage that situation, plan for it, and get schemes ready that we can commit to and implement over that period. At the moment, it is quite a struggle. That is what we find with our BSIP funding at the moment. We have BSIP funding, but we have to prioritise and work out what we need to deliver over quite a tight timescale.

If you want to recruit someone, you want to offer them a permanent contract. If you have only one-year funding you cannot do that, so long-term funding is vital.

I understand what you are saying about people being there and that long-term funding helps with that. The other point is about what skills those officers have, because we are moving increasingly to a new world, aren’t we? Officers traditionally provided sticking-plaster solutions to services that didn’t work, and never would. Now we are talking about officers who need skills in financial modelling and performance monitoring in contract negotiation. It is an entirely different thing, particularly if you move to full franchising, but even now when we are talking about enhanced partnerships, or the quality contract schemes that the Government have put into the buses Bill. How do we make sure that officers have that new set of skills, as opposed to them just being there for a long time?

Leicestershire County Council has apprenticeships, graduate schemes and programmes in the environment and transport department, which is my department. Those graduates and apprentices move around various departments, including sustainable travel where bus operations sit—my department, which is transport strategy and policy—to get experience of transport planning. We have realised that we need to grow our own in-house capability and expertise. We have a lot of officers who are very knowledgeable about things. The transport planning profession is an ageing one and we are losing that knowledge and experience, but we recognise that we need to pass it down to future generations if we are to survive and deliver the transport networks which our communities need. We have already taken steps to do that.

I would add to your list of skills partnership working, relationship managing and marketing. You are absolutely right that a multi-faceted skillset is required. We have talked in the east about the potential for some sort of graduate scheme whereby you bring through the next generation of transport planners, perhaps sharing between local authorities in our region, Transport for London and the Government. This initiative could really take off. Buses could be one of the key themes we focus on, and it would be great if that was a recommendation of this work.

There is such a number of people I come across who have worked for Transport for London and who now work for all sorts of good employers.

Probably there has to be some sort of answer to the gap that has come about from the 1985 Transport Act about how bus services that are not necessarily profitable are to be provided. There are different approaches to that. I would not want there to be a one-size-fits-all approach. I don’t think there could ever be a situation where central Government would say what that was, but if it was locally decided, maybe done in partnership using local knowledge, something like that could potentially help with the rural services we have been talking about.

Can I say something that refers to the last question as well? The skills and capacity are already there and available and ready to be used. I use as an example what is going on in Manchester where we have TfGM. Andy Burnham’s team is working very closely with Unite to provide a proper service for the public and provide proper jobs for the people driving the buses, who at the moment are, unfortunately, suffering from all kinds of fatigue. I don’t think minimum service levels should be imposed, but they should be brought in. I would be delighted to see that. There has to be some control over the operators at the moment. I wouldn’t say they are not concerned about the problem, but they are not fixing it.

For Leicestershire, a minimum level of service is needed. We are reliant on our bus network; it is crucial. We do not have an extensive rail network like other cities and surrounding urban areas. We have Leicester railway station. South Wigston, Narborough, Market Harborough, Melton and Loughborough are our key train stations. We don’t have local rail connectivity, so our bus network is the key driver in moving people around, if you cannot rely on cars. Having a minimum level of service is probably very important to us, because that is the key form of public transport that the county has.

You would have to be very clear about how you define the minimum level and what you are measuring. Some of the feedback from our local authorities is that in the past it has been tried, but where you do not have the funding to deliver it ultimately it fails, so you need to have a degree of flexibility around the measure. The other thing that has been articulated is what the minimum service would be. Is it between, say, a village and a town? The challenge is that not everyone wants to go from that village to that town; it might be that they want to go to other places, so you start to get quite a complex network of minimum levels of service that you have to provide. You then run into the problems we have already talked about. It probably goes back to outcomes and giving some degree of flexibility to local areas to be able to decide them. As others have said, I agree that the concept is a good one to ensure that there is accessibility to tackle the social exclusion we have already talked about today.

We are slightly pressed for time, although some of the issues in questions we were due to ask now have been covered, which is partly my fault.

Some of you have already touched on the challenge of making bus competitive with car, which has clear advantages, certainly on the surface, in terms of convenience and attractiveness. In my constituency one sees good examples of integration between bus and rail—like Didcot Parkway—but it tends to be less good in the evening when bus frequencies decline. Some parts of the constituency, like Stanford in the Vale, only have an hourly daytime service and nothing in the evening. In that context, what role do you feel buses should play in the Government’s integrated transport strategy?

They should be the absolute heart of it. They are the most used public transport mode in the country; they are essential for so many people, and if we can find the right way to make them even better, they will be used by even more people. It has to be looked at as a whole package. Everybody has some sort of journey to make to get to a bus stop, so we have to think about what that looks like, particularly in rural areas. Many of the features of urban bus stops, for example—nice kerbing, tarmac, a bus stop pole and clear information—do not necessarily exist outside urban areas. It also has to be thought about from that point of view. Is it being made as attractive as possible in rural areas? Are people getting the whole journey experience? Buses have to be absolutely key.

Mr Morton, you have raised the real issues with bus driver shortages several times. Unite has reported a current driver shortfall of 4,000. What impact would you say that driver shortages have had on bus services’ viability and reliability?

That is the $64,000 question. I will try to give a proper answer. We have to look at why there is a shortage. When I was a lot younger, loads of people wanted to work on the buses. It was the ideal of many youngsters at the time. That ideal has slipped away, because now a lot of people don’t wish to work on the buses. Even the drivers we have now are becoming more and more disillusioned with their lot. There are a number of reasons for that. One is low wages. There are places where you can work as a bus driver for the same money as you would get stacking shelves in one of the larger supermarkets. Obviously, that does not apply across the board, but it does in some places. There are low wages. There are long hours. Not so long ago I attended a branch meeting of bus drivers. As usual, they were all making complaints, which I get used to when I go to bus driver meetings. One thing I noticed that no one spoke about was that everybody in the room, apart from me, was drinking Red Bull. If people do not know what Red Bull is, it is a sugar-infused drink that gives you energy or, in a bus driver’s case, makes you better equipped to fight fatigue.

It’s caffeine. It keeps you awake.

There are other things in it as well. I do not want to go into all of the details on the can, but those people were drinking Red Bull to enable them to drive buses without closing their eyes. You start to close your eyes and you go to sleep. I am deeply worried. I have nightmares in which a bus full of passengers is driving along the road and it crashes into a bus stop full of people, for the reason that the bus driver falls asleep at the wheel. I saw it recently happen in the London area; a driver fell asleep and it was due purely to fatigue. Very luckily for me, the driver and everyone else, no one was hurt, but it is only a matter of time. Because of fatigue and the extra hours people have to work, my nightmare will come true and a bus will cause damage due to driver fatigue.

We have worked hard to solve the bus driver shortage. It was a clear problem when we came out of covid. That changed fundamentally all kinds of different things for us in terms of how we look at our workforce and want to look after our bus drivers. There was a significant shortage across the industry and in First. I would say that particularly in First in the last six months or so all our hard work to resolve that has come good. We have a small vacancy gap, but it is nothing like it was, and it is certainly not having the impact on services that perhaps it had 18 months or two years ago. We are the largest bus operator to pay a real living wage. We have invested in flexible working arrangements, healthcare for our drivers, learning centres and fair wage awards, so it has largely been solved for First Bus. We have tried to be quite nimble about when we need to do things. In the Norwich, Norfolk, example when the BSIP money was available to improve services, there was a risk we would not be able to do that because of the driver shortage, but we worked in a different way. We took on some agency drivers to help with that. We have not let it become necessarily a barrier to some of the growth we wanted to see. It is largely resolved, but we need to keep working hard at it. It is a hard job and we want people to do it, because it is also very rewarding to carry your community about on a daily basis.

There are four factors related to bus drivers in rural areas that we have experienced. One is that where those areas overlay tourist hotspots and, therefore, a large amount of second home ownership, bus drivers are priced out of the market for housing. Therefore, there isn’t a pool of bus drivers available, particularly in areas such as north Norfolk and the Suffolk coast. We have seen that as an issue. Subsequently, one of the operators in north Norfolk at the minute is doing a very proactive campaign with increased pay for bus drivers to try to reverse that. The second issue we have been seeing in the east is that, because we have a large amount of NSIPs coming in, for example Sizewell C, a lot of bus drivers go to jobs on buses for those developments, taking them away from commercial. To go back to TfL, there is a lot of competition between Essex and London, with London paying more for bus drivers and, therefore, drivers who would otherwise be in Essex are going to London. The other thing about the east is that as we are an international gateway—we have 13 ports and a huge amount of freight—there is competition with freight for drivers as well, in both HGV and the increased number of delivery jobs that are available. Competition from other driving jobs is causing an issue there across the board.

You have talked about a number of different issues and barriers in relation to recruitment and retention. A lot of that has been focused on recruitment. Pay is obviously a big part of it, but when it comes to retention what have you found works and what more needs to be done?

It is the element about shifts and rotas, the flexible working element, and how differently people want to work and live their lives these days. We have been looking very hard at all kinds of different versions of part-time working, casual hours and weekends only. We have become much more open to having people work in a different way from the traditional five over seven, or 37-hour week. That doesn’t work any more. To attract and retain people, we have had to adapt how they work with us and how willing we are to be flexible on hours, days of the week and that kind of thing.

The last question covers an issue we have not gone into in a lot of detail.

How effective do you think the Government’s recent £1 billion funding allocation for bus services will be in improving services across more rural and suburban areas? To bring this in at the same time, a lot of you have spoken about long-term funding settlements. What period do you think long term is and what timescale would be appropriate?

In our spending review submission to Treasury a few weeks ago we were very clear. It is five years confirmed funding, plus five years indicative, so a 10-year funding horizon to give certainty to local authorities that they can plan for the future and tackle the issues we have talked about today.

From our perspective, we got funding allocated under the ZEBRA 2 initiative to try to provide electrified buses on rural networks, but the rules and procedures we had to go through restricted our ability to deliver it, because it was focused more on urban areas. That is the biggest challenge. We welcome funding and any support we can get to deliver our bus network, but the challenge for us is that, when those constraints and barriers are placed on us, as we have heard from the discussion this morning, they prevent us from being able to deliver what we need to and invest the money to the benefit of our communities.

You ask how long it should be. It should be as long as it works, so that everyone it affects is happy with the way the funding is spent. I would not put a figure on how long it should be, but if it is working it can go on forever; if not, you change it right away and get back to the state where it is working and, once again, for as long as it is working that is how long it should be there.

On the question of risk, in the new world that we are going towards, with more franchising, enhanced partnerships and enhanced partnerships-plus, we will be in a situation whereby local transport authorities retain the fare book income. That clearly has some possibility for reward, but also the possibility of risk. From a local authority perspective, how will you calculate that risk? It is a fundamental change for private operators. Your risk will change as well. What risks do you see from a private operator point of view? You will still be in the market in franchising, yet your business model will change.

Our risks are more around adapting ourselves and getting the right skillset—not dissimilar from some local authorities—to move more into a bidding-for-work process, not necessarily a bus‑operating mindset. We are busy doing that. The risk is that we are committing to a five or maybe seven-year tender or franchise, and as part of that we have to get things right. We have to be much better at predicting the future and committing to a much more long-term set-up than perhaps we are used to.

From our perspective, we cannot consider franchising at the moment alone. We are considering what our options are. We are still in an enhanced partnership working with the bus operators and Leicester City Council to deliver our bus network. We recognise the benefits that can come from that in providing better value for money in bus routes, and being nimbler and more innovative in the way we provide local services, especially rural services. Earlier, I gave the example of DRT. There are opportunities with it, but at the moment as a local transport authority we are not in a position to consider it.

I am afraid we have run way over time. I want to give the second panel an equal chance. We didn’t cover sufficiently some things you may want to give us your thoughts on in writing: the imbalance of BSIP funding between rural and urban areas; cost drivers being within local authorities’ control and how they vary between different kinds of area; and your thoughts on the fare cap. That brings us to the end of our first panel. Thank you for your evidence and, as I said, do write to us on those issues and anything that you think we did not cover sufficiently.