The Government recognises the extra pressures placed on local authorities to provide services in more isolated areas. Where there is not enough demand for a bus route to be commercially viable in its own right, all local authorities have powers to subsidise bus services.
Since January 2014, £40m Bus Service Operator Grant (BSOG) funding per year is paid directly to local authorities, rather than bus operators, in relation to the services that councils fund. This funding is ring-fenced to ensure that it is used to support bus services, but within that it will be for each local authority to decide how to use it.
Our Total Transport pilot projects encouraged local authorities to innovate by joining up the commissioning of publicly funded transport services so that available funding goes further. The lessons learned from these projects have been circulated and the Government encourage local authorities to explore these options.
The Bus Services Act 2017 also provides a number of tools to facilitate local authorities working together with operators and communities to provide improved bus services in rural areas.