Draft Franchising Schemes (Franchising Authorities) (England) Regulations 2024

The Committee consisted of the following Members:

Chair: Andrew Rosindell

† Bacon, Gareth (Orpington) (Con)

† Bedford, Mr Peter (Mid Leicestershire) (Con)

† Carden, Dan (Liverpool Walton) (Lab)

† Conlon, Liam (Beckenham and Penge) (Lab)

† Dearden, Kate (Halifax) (Lab/Co-op)

† Forster, Mr Will (Woking) (LD)

† Gilbert, Tracy (Edinburgh North and Leith) (Lab)

† Khan, Afzal (Manchester Rusholme) (Lab)

Kohler, Mr Paul (Wimbledon) (LD)

† Lightwood, Simon (Parliamentary Under-Secretary of State for Transport)

† McNally, Frank (Coatbridge and Bellshill) (Lab)

† Osborne, Kate (Jarrow and Gateshead East) (Lab)

† Pinto-Duschinsky, David (Hendon) (Lab)

† Qureshi, Yasmin (Bolton South and Walkden) (Lab)

† Raja, Shivani (Leicester East) (Con)

† Smith, Greg (Mid Buckinghamshire) (Con)

† Sobel, Alex (Leeds Central and Headingley) (Lab/Co-op)

Chris Watson, Committee Clerk

† attended the Committee

The following also attended (Standing Order No. 118(2)):

Goldman, Marie (Chelmsford) (LD)

Fourth Delegated Legislation Committee

[Andrew Rosindell in the Chair]

Draft Franchising Schemes (Franchising Authorities) (England) Regulations 2024

16:30:00

I beg to move, That the Committee has considered the draft Franchising Schemes (Franchising Authorities) (England) Regulations 2024. It is a pleasure to serve under your chairmanship, Mr Rosindell, to discuss the draft regulations, which were laid before the House on 9 September. I congratulate the hon. Member for Orpington on his appointment to the shadow Front Bench. Buses are the most popular form of public transport, with 3.4 billion passenger journeys made on local buses in England in the year ending March 2023. They are an essential part of our national transport system in both urban and rural areas. Many people rely on buses to get them where they need to go, whether that is work, school, the hospital or the shops. Modernising transport infrastructure and delivering better buses is at the heart of the Government’s plan to kick-start economic growth in every part of the country and to get it moving. However, numbers of passengers and bus services have declined, with 2 billion fewer annual bus journeys in 2023 than in 1985, and almost 300 million fewer miles driven by buses in 2023 than in 2010. Enough is enough. The Department for Transport is embarking on a reform programme to deliver its commitment to empower local leaders to take control of their bus services, and to support more integrated and effective bus networks. The better buses Bill, announced in the King’s Speech on 17 July 2024, is a major part of that plan, but the Department is taking more immediate action to support local leaders to deliver better buses. The first step was taken on 9 September 2024, when the Department announced a package of bus franchising measures, comprising two elements, to support the plan. The first is the publication of a consultation to gather views on the proposed updates to streamline bus franchising, which will speed up and lower the cost of pursuing franchising for local transport authorities. The Department is considering the views it has received and will publish its response shortly. Secondly, this statutory instrument was laid to open up bus franchising to all local transport authorities. Both measures support the Government’s aim of ensuring that local authorities have the tools they need to plan and deliver services in a way that suits their needs. Bus franchising is one of those tools. Under this model for providing bus services, local authorities grant private companies the exclusive right to operate in a specific area or on a specific route. The authorities retain control over key aspects of the service, such as routes, timetables and fares. Where bus franchising is in place—in London and now in Greater Manchester—buses have thrived. Greater Manchester has already improved reliability and significantly grown passenger numbers, less than a year after moving to franchising. Bus franchising powers were created for local transport authorities in England outside London in the Bus Services Act 2017. The powers to begin a franchising assessment—essentially a business case—were automatically provided to mayoral combined authorities and mayoral combined county authorities. Currently, all other types of local transport authority wishing to prepare a franchising scheme assessment face a two-stage pre-assessment process. First, regulations must be made to switch on access to franchising powers. Secondly, the Secretary of State must give her consent to any individual authority to prepare an assessment of its proposed franchising scheme. This statutory instrument implements the initial stage of that process for all local transport authorities, ensuring that they will need only to obtain the Secretary of State’s consent to prepare a franchising scheme assessment. That will reduce the barriers facing those local transport authorities in pursuing bus franchising. This statutory instrument, and the updated bus franchising guidance, is focused on what can be achieved quickly to bring much-needed reform to bus services. The Government are not mandating changes within this statutory instrument. Bus franchising remains optional, and local transport authorities are best placed to decide which approach is right for their areas. Our plan is about ensuring that local leaders have as many tools and options at their disposal as possible to deliver better services for passengers. The Department will also provide dedicated support to local authorities interested in pursuing bus franchising. The next stage of our reform will be the introduction of the buses Bill, which will seek to make bus franchising even quicker and easier to deliver, to devolve funding and to improve accessible travel. It will also improve bus services for councils who choose not to franchise. The transformative work the Government are doing will turn the tide by giving communities the opportunity to control local bus services and have a real say in building the local transport networks that form part of their communities. I commend this statutory instrument to the Committee.

16:36:00

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank the Minister for his warm words of welcome at the outset. We recognise that the expansion of bus franchising was a Labour party manifesto commitment, and we are not going to oppose that mandate. In fact, in principle, we support the idea of local areas having more say over the services they can offer local people. But there are some question marks over these plans—questions that my hon. Friend the Member for Bexhill and Battle (Dr Mullan) raised back in September in relation to the Minister’s statement to the House, and which, I am afraid, we are not yet fully satisfied we have heard answered. Will the Minister therefore answer them today? First, how much has been budgeted for the increased cost of this plan to the Department for Transport, to support local authorities to prepare these assessments and then to measure them against the criteria, and also to help local authorities plan their franchises when they do not have the experience to do so, which I believe the Minister has said is part of the plan? Secondly, how much has been budgeted for the increase in costs to local authorities, both in terms of the additional resources they will require to plan and run bus services, and in a business sense? In many rural areas, and even in Greater London, bus services lose money and often require subsidies. Where will that money come from? And, while we are at it, where will the money to buy the buses come from? The Minister suggested that the coming buses Bill would contain regulations about devolving funding—I would like to hear a bit more about that. If the answer is that we have not budgeted for it, or that it is coming from existing budgets, that can only mean council taxes going up, or cuts to local services such as social care or universal services such as waste collection. There would appear to be no third option. At the end of the day, passengers do not care who is running their bus; they care about the price, performance and reliability of services. We are yet to hear a convincing case for how these reforms will actually make a difference to passengers’ journeys. Are buses more likely to run on time and, if so, by how much more? Will these reforms help to restore the number of rural services? Will they make journeys cheaper for passengers? That seems unlikely, given the 50% hike in fares. I do not doubt that bus franchising can, does and will work for some areas, but the insinuation of today’s statutory instrument is that it should be happening everywhere. We have yet to hear anything that convinces us that that will be the case, and that is not to mention the fact that the proposal currently appears to be unfunded. I would be grateful if the Minister could assuage our concerns this afternoon.

16:39:00

I refer Members to my entry in the Register of Members’ Financial Interests, as an MP who has been on picket lines of bus drivers over the years and who is supported by trade unions. I just want to take this opportunity to thank the Minister for bringing this measure before us, to welcome the proposals and to say, on behalf of my constituents in Liverpool, that we have often felt like the poor relation to London, with buses that are more expensive, work far less well and are far less reliable. Local leaders have been crying out for the opportunity to take back control of buses and to deliver what our local communities really need, so we are hopeful that this proposal will bring about some real change. I just wanted to take the opportunity today to put my support on the record.

16:40:00

I also want to take the opportunity to tell the Minister that we really appreciate these proposals in Greater Manchester. As a former bus driver, I know about the need for them and about the difficulties with cross-community connections. Great work has been done with the Bee Network in Greater Manchester, and the sooner these proposals can be rolled out, the better for all our constituents.

16:41:00

I thank Members for their consideration of the regulations, and I will try to respond to the points they have raised. On funding, the Government have committed to delivering better buses, and the investment confirmed in the Budget is the next stop in our journey towards improving services. We have confirmed investment of over £1 billion in 2025-26 to support improved bus services and to keep fares affordable. That funding includes £151 million to introduce the £3 national bus fare cap on single fares from 1 January until 31 December 2025; £640 million for local transport authorities to support and improve bus services in their bus service improvement plans; and £285 million for the bus service operators grant, to protect and continue the running of existing services. Of course, officials now need to run a detailed business planning exercise to work out the exact allocation of those amounts. Local transport authorities and bus operators will see further information on that as soon as possible when the process is concluded. That investment sits alongside measures we have already undertaken to reform the bus system, including through the buses Bill, which will be introduced later in this Session, as we seek to ensure that local leaders have the powers they need to deliver better buses in their areas. Let me turn now to how we will support local transport authorities to deliver franchising. The changes provide additional options to enable franchising, so that local transport authorities have the ability to choose the model that works for them. There is no one-size-fits-all approach; it could be franchising, municipal bus companies or enhanced partnerships. The Department for Transport is building its capacity to provide tangible, on-the-ground support for local authorities that wish to take back control of their bus services. The buses Bill aims to make franchising easier and cheaper to deliver, to further reduce the barriers to bus franchising. The Department for Transport is working with stakeholders to determine how local transport authorities can best make use of the new toolkit the Bill will provide and deliver bus services suited to the needs of their local communities. On rural communities, I would argue that local transport authorities are actually best placed to manage their local networks. By devolving powers to their areas and allowing them to take back control and have a greater say over the funding, we are leaving them much better placed to make decisions on rural bus routes than someone sitting in Whitehall or indeed Westminster. This statutory instrument represents an important first step towards delivering the Government’s aim of ensuring that local authorities have the tools they need to plan and deliver services in a way that suits their communities, and the upcoming buses Bill will build on that progress. Through this statutory instrument and the Bill, the Government will deliver on their plan to improve bus networks and end the postcode lottery of bus services. That plan is centred on putting control of local bus services back into the hands of the local communities that use them, and will give local leaders more control and flexibility over bus funding, as well as the freedom to take decisions that deliver their local transport priorities. This statutory instrument reduces the barriers that may prevent local transport authorities from pursuing franchising, and is a crucial first step in the process I have outlined. I commend it to the Committee. Question put and agreed.

16:45:00