Written evidence submitted by Transport for Greater Manchester (BUS0041)

1. Introduction

Greater Manchester welcomed the publication of the Government’s National Bus Strategy (NBS) in March 2021 and its statement of intent to transform bus services in line with the work already underway in Greater Manchester to reform the quality of our bus provision and move towards a franchising system using the Bus Services Act, the first city region to do so. The National Bus Strategy rightly articulated the huge potential for buses – by far the most heavily used form of public transport in the country and across Greater Manchester. It outlined how they need to play a central role in supporting economic growth across the country; in supporting levelling up by enabling the most excluded groups to access opportunities; and in driving the decarbonisation of the transport system.

Greater Manchester will have franchising in place from 2023, and as the only area outside London with a coherent regional spatial plan identifying key housing and employment sites, it is uniquely placed to work in partnership with Government to deliver the NBS at a city-region scale and secure major progress against levelling up outcomes within this Parliament.

In October 2021, Greater Manchester Combined Authority (GMCA) formally responded to the National Bus Strategy with a Bus Service Improvement Plan (BSIP) which articulates the GMCA’s vision for a modern, affordable and fully integrated bus service for the city region.[1] The plan proposes a level of funding over three years that is required to deliver the ambition of the NBS in GM, and includes investment in crucial revenue funding required to realise shared proposals for a London-style transport system with London-style fares. Greater Manchester’s City Region Sustainable Transport Settlement (CRSTS) Prospectus, submitted to Government in September 2021 and subsequently revised and re-submitted in January 2022 following discussions with Government, sets out a series of interventions to complement the BSIP proposals to help deliver a step change in the quality of bus services in the city-region.[2] This includes a £1.2bn five-year capital programme of investment in improving public transport connectivity across GM, with £438m investment specifically targeted at improving buses, routes and services.

Transformed bus services are a key pillar of GM’s Bee Network vision for an integrated transport system which will unify buses, trams, cycling and walking by 2024, with commuter rail incorporated by 2030, to transform how people can travel in Greater Manchester. The Bee Network vision is underpinned by the Greater Manchester Transport Strategy 2040, Greater Manchester’s statutory local transport plan, and the aim for the ‘Right Mix’ of transport modes on our network: 50% of trips to be made by sustainable modes, with no net increase in motor vehicle traffic, by 2040.

2. Summary of recommendations

• The transformational ambition of the National Bus Strategy cannot be delivered until there is stability in the bus market. Therefore, for the NBS to be successful, in the short-to-medium term there will continue to be an urgent requirement for Government to put in place the necessary funding base to ensure the bus sector is able to stabilize as it seeks to grow out of the pandemic. Without this, commercial operators may be expected to undertake wide-scale deregistrations or reductions in service frequencies, timetables or routes in a climate of stifled farebox income resulting from patronage continuing to be at below pre-Covid levels.

• Government needs to be planning for the next three years in order to establish the right base network to meet current demand. A tapered funding model for the local bus system over this time period is required to support a sustained market renewal programme which could return demand close to pre-Covid levels by the end of 2024/25 in Greater Manchester. In order to then deliver the commitment – made both in the National Bus Strategy and the Levelling Up White Paper – to raise the public transport travel offer for places outside London to the level that is currently only enjoyed by those in the capital, serious and sustained investment from Government is required.

• Through the BSIP process, Government needs to support investment in increased service frequencies, reflecting the importance of high frequency services in attracting car users across to public transport. Bus fares also need to be made more attractive and equitable to stimulate demand: under franchising GM seeks to offer the sort of fares that are currently only available to customers in London.

• The level of modal shift required from the car to sustainable transport modes to support decarbonisation objectives will require a step change in the bus offer covering customer experience, frequency of services, information, fares and ticketing. It is critical that the National Bus Strategy is able to support GM and other places to deliver across all these areas: cherry-picking elements of this package of measures would fundamentally undermine the potential to deliver any meaningful levelling up towards London standards and would undermine the success of the Government’s ‘Build Back Better’ agenda on bus. To this end, to deliver the aspirations set out in the NBS it will require a long-term commitment from Government, beyond short term funding horizons.

• To ease the transition to a franchised system – which is supported by the National Bus Strategy - and help other city-regions to start to deliver the benefits of local control more quickly, Greater Manchester is keen to work in partnership with Government so that other places can benefit from Greater Manchester’s experience and to look at how the franchising process can be improved.  

3. Current bus sector in Greater Manchester

The announcement of the National Bus Strategy was in response to a long standing and continuing trend of declining bus patronage in the majority of England, which has only been worsened by the Covid-19 pandemic. Over recent decades, buses in Greater Manchester have not fulfilled their potential in terms of providing an attractive and credible alternative to car travel.

Bus travel in Greater Manchester has declined from a peak reached around 1950, with the decline accelerating since deregulation in 1986. Declining bus patronage set in motion a self-reinforcing cycle of reduced bus patronage, reduced service frequencies, and higher fares, which has left far too many of Greater Manchester’s communities with insufficient and inaccessible local bus services. The result has been that bus travel is now seen by too many people as a ‘choice of last resort’, and levels of car dependency have dramatically increased. The decline in bus use and increased use of private vehicles has contributed to a wide range of negative impacts on Greater Manchester, such as the decline of town centres; growing congestion, as well as social and economic inequalities; and increased greenhouse gas emissions, noise and air pollution from transport.

The challenges described above, and the realisation that a deregulated bus service could not provide GM with the ability to create a genuinely integrated public transport system that can fulfil the potential of bus to much better serve residents, business and communities across the conurbation led to the need to reform the bus market.  In order to deliver a transformed ‘London-style’ bus network, the Mayor announced his decision in March 2021 to bring buses under local control through a franchising system. Under franchising, GMCA will coordinate the bus network and contract bus companies to run the services enabling GMCA to develop an integrated, multimodal public transport network that can meet the demands of both passengers and the city-region's economy.

After a legal challenge brought by bus operators in June against the city-region’s bus franchising plans was dismissed by a judge in March this year, the Mayor set out a revised timetable for the implementation of franchising.  This will see regulated buses introduced in three tranches across the city region.[3] Bolton and Wigan as well as parts of Salford and west Manchester will see the first franchised services introduced in Autumn 2023. Bury, Rochdale, Oldham and areas of north Manchester will follow in Spring 2024, with the final tranche covering Stockport, Trafford, Tameside, south Manchester and remaining parts of Salford by the end of 2024.

Despite the decline in bus patronage in recent decades, buses continue to be a lifeline for many people in GM and provide three in every four public transport journeys. Women, young people, those from mixed ethnic backgrounds, Black or Black British people, and those with a disability or mobility impairment are also disproportionately more likely to travel by bus (GM TRADS 2017-2019); these groups are more likely to experience multiple forms of disadvantage and social exclusion and therefore could particularly benefit from improvements to the bus system. In Greater Manchester, the Leigh - Manchester Busway service, which provides bus rapid transit between Leigh, Salford, Manchester City Centre and the Oxford Road corridor, has already demonstrated the potential of buses to attract new customers when services are reliable, and vehicles are modern with live customer information on board and at stops.

The Covid-19 pandemic continues to have a significant impact on the bus sector, with the ongoing reduction in patronage resulting in reduced revenue to operators through the farebox. Unlike other forms of public transport, bus has retained its 75% share of public transport journeys throughout the pandemic; however, although buses have held their share of all public transport trips, passenger volumes remain significantly down on pre-Covid levels (by around 25% at present). Overall, the bus network in GM has reduced in scale since the start of the pandemic by around 10%.

While the Government has focused on the importance of the BSIP process in helping to create ‘London style’ bus networks around the country, this kind of step-change improvement cannot happen until and unless there is stability in the network. In the short-to-medium term therefore, there continues to be an urgent requirement to put in place the necessary investment to ensure the bus sector is able to stabilize as it seeks to grow out of the pandemic, without having to resort to wide-scale deregistrations or reductions in service frequencies, timetables or routes. This was reflected in GM’s BSIP ask, which included circa £30million per annum for network recovery and stabilization costs.

4. Bus funding

GM has been making a case to Government for many months that significant and sustained funding is needed to provide stability in the bus market post-pandemic. The funding announced by the Secretary of State on 1st March 2022 of over £150 million for bus and light rail operators is welcome but has been confirmed as the final 6-month Covid-19 support package that Government will provide to these sectors. In order to rebuild demand for public transport in the face of uncertainty over how customer markets, such as office workers, will develop in the future, GM’s view is that Government needs to be planning for the next three years in order to establish the right base network to meet current demand.

A tapered funding model for the local bus system over this time period is required to support a sustained market renewal programme which could return demand close to pre-Covid levels by the end of 2024/25 in Greater Manchester. However, without this multi-year approach, there is a risk that the network declines, and residents - often in our most deprived communities – become isolated from taking up employment and other opportunities that the city region has to offer: a crucial component of the levelling up agenda.

In order to transform the bus network in GM, our BSIP emphasises the need for Government to support investment in increased service frequencies, reflecting the importance of high frequency services in attracting car users across to public transport travel. With around only one-fifth of the bus services per square mile that operate in London, too many of the bus routes in GM lack the frequency and density of service that give confidence for people to shift to bus travel. Bus fares also need to be made more attractive and equitable, enabling GM to offer the sort of fares that are currently only available to London travellers. With average salaries in parts of Greater Manchester at no more than 50% of parts of Greater London, levelling up cannot be achieved whilst the basic cost of travel is so geographically skewed. This is something Greater Manchester is trying to address through franchising, with the Mayor announcing that under a franchised bus network adult single journeys will cost no more than £2, and single child journeys no more than £1. This is in contrast to the present, deregulated market where there are more than 150 different types of bus tickets available; a single bus ticket can cost £4 and often does not allow passengers to transfer between buses or other types of transport.  Franchising provides GM with the platform to create integrated public transport with bus at its core, connecting with Metrolink and local rail, and permitting the development of a unified and simple fares structure. However, without stable and predictable revenue support, the full benefits may not be realised.

5. Decarbonisation and modal shift

As well as levelling up, increasing bus use is also central to the cross-Government climate change and decarbonisation agendas, with the Department for Transport’s Decarbonisation Strategy identifying the stimulation of modal shift as being a primary objective if the sector is to support net-zero targets. The same is true in Greater Manchester, where our ‘Right Mix’ requires 50% of all trips by 2040 to be taken by public transport, on foot or by bicycle. Within the Right Mix, we have set targets for volumes of bus trips in Greater Manchester for three time-horizons: 2025, 2030, and 2040. In order to meet our ‘Right Mix’ targets for bus travel we will need to reverse the trend of decline in patronage and then increase bus travel in Greater Manchester to approximately 10% above its pre-Covid level. We expect bus travel to be around 83% of its pre-Covid level once patronage settles down following the pandemic, reflecting the longer-term adverse effects of increased home-working and online shopping. That implies we will need to increase bus travel by approximately 30% by 2030.

This level of modal shift away from the car and towards sustainable transport modes require a step change in our bus offer. This will be achieved across a number of key themes, as set out in our BSIP proposal, including customer experience, more frequent services, information, fares and ticketing. We also want to move to a greener bus fleet and are seeking a minimum of 33% zero-emission buses (ZEBs) in our fleet by 2027, and to have all fleet electrified by 2032. Our short-term priorities include introducing 25 ZEBs that will run on our Guided Busway and 170 ZEBs that will convert all services run from Stockport bus depot (subject to Zero Emission Bus Regional Areas (ZEBRA) funding).

It is critical that the National Bus Strategy is able to support GM and other places to deliver across all these areas: cherry-picking elements of this package of measures would fundamentally undermine the potential to deliver any meaningful levelling up towards London standards and would undermine the success of the Government’s ‘Build Back Better’ agenda on bus.

6. Progress against the targets of the National Bus Strategy

In October 2021 when local and combined authorities including GMCA submitted their BSIP proposals, this was based on the Government’s guidance to develop ‘ambitious’ plans and an understanding that £3 billion of central Government funding had been set aside to support the delivery of BSIPs nationally over the 3 years from April 2022, as set out in ‘Bus Back Better’.[4] However, the budget available for transformation of bus services – including for zero emission buses - has since been confirmed as £1.4bn over the next three financial years in a letter sent to Local Transport Authorities (LTAs) by the DfT in January this year. At the time of writing, GM’s allocation of BSIP funding is not known. However, given that LTAs are bidding for a reduced pot of funding than initially understood it is unlikely that Government support will be able to meet the scale of ambition displayed in the bids.

Noting the change in scale of money to be made available through the BSIP mechanism, Greater Manchester has reviewed our proposals across both BSIP and CRSTS to ensure our commitment to bus transformation as part of franchising and the wider Bee Network vision is not put at risk. Subject to Government approval, GM have set out in their CRSTS proposals an initial £1.2bn five-year capital programme of public transport investment, with £438m investment specifically targeted at improving buses, routes and services. This includes £205m for new electric buses and infrastructure; £202m to improve bus services, with new quality bus lanes, corridors, and junctions; and £30m to improve [integrated] bus passenger information, fares and ticketing. As a Mayoral Combined Authority, managing the interface between the separate, but closely aligned, funding streams of CRSTS and BSIP has been challenging as both funds have been running to different timescales (five years and three years respectively). Looking ahead to future rounds of funding, both dedicated bus funding through future BSIP funding mechanisms (or their successor arrangement) and the next round of CRSTS funding, Government should be encouraged to consider how separate but inherently connected funding streams should be streamlined, coordinated or consolidated to maximise the efficiency of funding, the benefit to the taxpayer, and the on-the-ground impact of funding.     

Fundamentally, the success of the National Bus Strategy will ultimately be judged on the extent to which it helps to reverse the long-term trend of decline in bus patronage and achieves its goal of making buses ‘more frequent, more reliable, easier to understand and use, better co-ordinated and cheaper’. Importantly, its success should be measured by an evaluation of how an improved bus offer delivers more bus passengers and, in turn, how that helps to support wider non-transport objectives such as sustainable economic growth, improved access to employment, education and training, decarbonisation and air quality, and levels of disadvantage in society. The Levelling Up White Paper also now provides for the first time some specific measures of how levelling up will be evaluated, including in transport. This includes using metrics such as modal share, average journey time to centres of employment and bus punctuality and reliability to evaluate the extent to which the White Paper’s mission for local public transport connectivity across the country to be significantly closer to the standards of London by 2030.[5]

In order to deliver this commitment – made both in the National Bus Strategy and the Levelling Up White Paper – it is a clear that serious and sustained investment from Government is required. In the shorter term, to make progress against the ambitions set out in the National Bus Strategy, the two policy agendas of stabilisation of the network post Covid-19 and improvements of bus services will need to be closely linked so that Government policy recognises their inherent interrelationships and does not impair the chances of transformation by under-resourcing stabilisation. It will be very challenging for the Government to deliver its ambition to transform services across the country unless there is stability in the market.

GM is already working to improve the bus network by moving to a franchised system and can present other devolved city-regions outside of London a pathway to achieving franchising using the powers provided by the 2017 Bus Services Act. The current franchising process is lengthy and complex. Noting the explicit backing presented in the National Bus Strategy for places to move to franchising where it is right for them, in order to ease the transition to franchising and help other city-regions to start to deliver the benefits of local control more quickly, there are opportunities for Government to learn from Greater Manchester’s experience to look at how the process can be improved.

April 2022

Endnotes