An unhappy new year for public transport?

It’s been a shaky start to the new year for public transport and it could get a lot rougher yet.

Let me count the ways…

  1. The ‘work from home where you can’ advice has hit public transport’s core commuting market hard. Meanwhile the pre-Christmas binge on shopping and socialising which kept public transport patronage afloat looks like it has been followed by a hard January comedown
  2. Pre-Omicron, driver shortages were a serious problem for bus services with operators taking different approaches to managing them (in terms of whether the service reductions are short term or long term and whether they are focused on frequent routes or less frequent routes). Operators were also taking different approaches to how much effort and resource they were putting into recruiting staff. 

    Also, and unlike for road haulage, where the DfT has a proactive strategy for addressing multiple aspects of the driver shortage affecting the industry, there was no equivalent strategy from DfT for the driver shortage crisis on the buses. This has now been exacerbated by Omicron and associated self-isolation. Industrial action is also on the rise.
  3. Additional COVID funding support for urban public transport for public transport outside London runs out by the end of March and it’s not clear whether that funding will be sufficient given Government won’t share with us the patronage projections on which it’s based (which may prove to be optimistic).
  4. HMT standard practice is to take any decisions on additional funding right to the wire, however local tansport authorities have to set budgets well before the end of March and plan any service changes that may be required.

All of which points to operators moving to rebase commercial networks at a significantly lower level than they were pre-pandemic (and some are now starting to break cover on this). The onus then passes to local transport authorities to step in and pay private operators to keep services running. But local transport authorities themselves have limited resources to do so and the prices that private bus companies are quoting for keeping those services running have soared (price increases of 50% are not uncommon). This reflects both rising costs and operators taking advantage of low levels of competition for tenders in order to name their price.

The funding challenge for transport authorities with large light rail systems is particularly acute given that most of the costs of light rail systems are fixed so significant cost reductions are difficult to achieve (short of closing them down). They also have legal and fiscal responsibilities for their light rail systems which they do not have for bus services. So, if light rail funding isn’t extended beyond March 2022, then transport authorities may be forced to make savings from spending on bus in order to keep their light rail systems operational.  

It wasn’t meant to be this way. The national bus strategy (‘Bus Back Better’) launched in March 2021 envisaged a new dawn for buses with more, cheaper and greener bus services everywhere. It was predicated on £3 billion of additional ‘transformational’ funding and on the tacit assumption that the pandemic would soon be over. However, the pandemic is still here and in the November 2021 Spending Review the Treasury didn’t countersign the £3bn cheque that Number Ten wrote. We still don’t know how the bus money that the Treasury did agree to will be divided up. If more of it isn’t purloined for additional COVID revenue support, then this additional investment will be a shot in the arm for bus services in the areas that benefit – including through more bus priority schemes.

But the danger is that this may be too little too late as the first half of 2022 sees another lurch downwards in the scale and extent of bus networks – following on from years of pre-COVID decline and the hammer blow of the pandemic itself. There’s still time (but not much) to avert this. It could be done through devolving adequate funding to transport authorities to support networks in a planned, integrated and cost efficient way (rather than allowing the DfT to continue to take the path of least resistance and route hundreds of millions of pounds of COVID funding to private operators so that they can manage the decline of bus services in a way that serves their own commercial and corporate interests). It would also require a national strategy for tackling driver shortages as well as pressing the fast forward button on allocating the funding promised in the spending review to improve bus services so transport authorities can crack on without further clawback and second guessing from Whitehall.

Time is running out though.

Jonathan Bray is Director of the Urban Transport Group

Read more about the threat to public transport in our city regions in our briefing.

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