A roadmap for ‘better buses’

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Vendigital’s Phil Bulman considers the implications of the Governments new bus strategy

In March, the UK Government announced a £3bn strategy to make buses cheaper, more frequent and easier to use, while creating jobs within the industry and cutting down on carbon emissions. While the announcement was a positive step, improved collaboration between bus operators and local authorities and the smart use of data will be essential to increase passenger numbers and accelerate the sector’s recovery. Thinking of ways to get people out of cars and make buses a preferred and affordable transport option, including a consideration of transport connectivity and the overall passenger experience, will also be key.

According to Government figures, bus use has fallen steadily over the last decade. In 2009, 4.64bn journeys were taken on local buses but by 2019, that figure had fallen to 4.32bn. Since then, of course, the pandemic has also taken its toll and passenger numbers have plummeted further. Government’s new ‘Bus Back Better’ strategy – the first of its kind for the industry – aims to address this negative trend by improving the quality and affordability of UK bus services.


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Historically, private bus operators have been responsible for managing local routes and ensuring the profitability of their services. However, this model has ultimately resulted in a negative spiral of route cuts, leading to reduced service quality and higher ticket prices, inevitably further affecting passenger numbers. In April 2020, as a response to the Covid-19 impact on passenger numbers but the need to keep services running for key workers, the Government introduced the Covid-19 Bus Services Support Grant (BSSG).
The bus strategy points to a new approach based on the system used by Transport for London (TfL), where the routes, services levels and pricing are set by TfL, with private operators bidding to operate specific routes. All revenue (and revenue risk) is then managed and taken by TfL.

In this structure, the Local Transport Authority (LTA) then has an incentive to increase bus patronage, as part of a wider drive to decarbonise transport and reduce emissions, while improving the cost effectiveness of bus services. In this scenario, local authorities would be able to adjust fare pricing to incentivise passengers onto buses, while maintaining service quality. At the same time, the industry will need to develop innovative solutions that encourage increased bus use, and reduce congestion on bus routes. This is likely to include making it more difficult or expensive for people to use cars, particularly within city centres.

While the new strategy has been almost universally welcomed as a great step forward in thinking, there are still some unanswered questions about how it will work in practice. While the headline £3bn figure is a significant sum, it’s unclear how soon the funding will become available, where it will come from and how long the level of funding may continue.
It was clear from the March Budget announcement that ‘Levelling Up’ is a key focus of the Government’s post-pandemic recovery strategy. However, with a limited timescale for local authorities to access this additional investment, there’s a risk that some areas may not have the resources needed to secure access to the funding. This could exacerbate regional inequalities in bus services, caused by reduced council spending and resources in many areas outside of London.

With zero-emission vehicles currently representing just 2% of England’s bus fleet, this financial support could also play a key role in enabling local bus services to transition to green technologies, supporting the UK’s net zero ambitions. However, successfully decarbonising the sector will also require a significant focus on planning and infrastructure to support new fleets of battery-electric and hydrogen fuel cell-electric buses.

As stated in the strategy, in order to successfully deliver the Government’s new vision for UK buses, improved collaboration between bus operators and local authorities will be crucial. The ramping up of ticket prices in recent years reflects the challenge of running services in a cost-efficient way, especially at a time of funding cuts and low passenger numbers. However, such fare increases are ultimately unsustainable, especially given the comparatively low cost of motoring and innovations in other forms of transport, such as electric scooters. Instead, the key to improving service profitability while keeping ticket prices affordable lies in stepping up passenger numbers.

With factors such as the rise of e-commerce and home working creating uncertainty about future passenger numbers, the smart use of data could also play an important part in the sector’s
recovery. In order for operators to run services efficiently in years to come, effective demand planning will be essential. This will involve operators working closely with local authorities to capture and analyse emerging data, and adapt services accordingly.

The effective use of customer data could also help to make services easier to use, providing passengers with key information, such as where buses are at a given time and how much tickets will cost. In order to improve passenger experience in line with other areas of UK transport, such as taxis, the industry must also introduce demand-responsive solutions. Ultimately, the industry’s goal should be the development of a seamless multimodal transport model that is easy to use, involving the use of a single app. This would enable passengers to plan a journey from A to B involving several forms of transport, for example, trains, buses and cars.

With many UK bus companies currently relying on Government subsidies to stay afloat during the pandemic, it’s clear that a bold new strategy and significant investment is needed to avoid a cliff-edge scenario, and kickstart the sector’s recovery. By coupling this plan with a collaborative, data-focused approach to improving services, a new era for the UK bus industry could become a reality. Looking further into the future, developments in smaller, autonomous buses could also help to improve flexibility for passengers and improve cost-efficiency.

Phil Bulman is a partner and cost-based management consultant at Vendigital. He specialises in advising businesses in the transport sector.