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Norman Baker (The Parliamentary Under-Secretary of State for Transport; Lewes, Liberal Democrat)

I am today announcing a series of reforms which I propose to make to improve the system of local bus subsidy and regulation in England. These are set out in the paper “Green Light for Better Buses”, copies of which I have placed in the Libraries of both Houses.

I am also pleased to announce today an extra £15 million in funding for increasing the uptake of smart ticketing equipment, particularly among small and medium-sized companies. This makes a total bus funding package of £115 million, if taken alongside last week’s announcement, Hansard, 23 March 2012, column 81WS, on Better Bus Areas (£70 million) and the Green Bus Fund (£31 million). This considerable sum underlines the coalition Government’s firm commitment to investment in transport infrastructure, tackling congestion, and decarbonising transport.

Over the past year, I have been discussing with bus companies, local transport authorities and passenger groups the need for reforms to the bus services operators grant which the Government pay to every company that runs local bus services. The system of subsidy we have inherited is poorly targeted. It does not distinguish between profitable services and those that require local council support. It does not take into account the differing public transport needs of urban and rural areas. And it does little to incentivise fuel-efficient buses.

The proposals I am announcing today have been carefully formulated to attract more people onto buses, to ensure better value for the taxpayer and to give local transport authorities more influence over their local bus networks. They also signal a move to break the link between fuel use and subsidy.

The Government have also responded today to the recommendations from the Competition Commission’s report into the supply of local bus services in the UK (excluding Northern Ireland and London). We have committed to introduce regulatory changes that will

remove the barriers facing bus companies that attempt to engage in competition on new bus routes and in new bus markets.

We will also support and guide urban areas in their efforts to introduce new reasonably priced tickets that can be used on any bus, not just on those of a single company. And we will help local councils in their procurement of tendered bus services.

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