Yesterday’s budget elicited a number of responses from the industry. Perhaps the biggest announcement in the Budget from a PCV perspective is the change of the £2 fare cap to £3 for 2025. However, National Insurance contribution rises are expected to impact the sector and the £1bn pledged to support buses has been welcomed.

NI hike to ‘weigh heavily’

Alison Edwards, Director of Policy and External Relations at the Confederation of Passenger Transport (CPT), commented on the Budget: “We welcome the government’s ambition of improving buses nationwide and this week’s package of £1 billion in public funding for buses will safeguard vital routes and ensure that fares across England are capped at £3.

“However, our industry is a major employer in towns and cities across the UK, responsible for more than 150,000 jobs. The Chancellor’s increase in national insurance contributions will weigh heavily on bus and coach operators, typically costing £800 a year for each driver.

“This big tax rise will weaken the ability of bus operators to invest in higher frequencies, new routes and modern, environmentally friendly vehicles. And it will hurt coach operators, many of which are small, family-owned businesses.”

Aside from this, CPT welcomes the government’s decision to freeze fuel duty. Alison said: “Extra money to fix potholes will give our passengers smoother journeys. And the prospect of additional funding for hydrogen transport, and zero emission vehicles, is a positive as long as buses and coaches are included.

“Of every £10 spent on Britain’s high streets, a pound is spent by bus passengers – contributing almost £40bn a year to local economies. Long distance coaches, meanwhile, carry visitors who spend £8.3bn annually in towns, cities and tourist destination.

“Collectively, the bus and coach sector is vital in achieving the government’s missions of kickstarting economic growth and breaking down barriers to opportunity. However, contradictory policies which, on the one hand, support public transport and on the other hand impose substantial extra costs, are unhelpful.”

Billion for buses

Jason Prince, Director of the Urban Transport Group, said: “The Government has rightly moved at pace since the election to place transport at the heart of its growth strategy.

“A ‘billion for buses’ is welcome funding – ensuring earners and learners can get to work and college. Also welcome is the commitment to City Region Sustainable Transport Settlements.

“Alongside greater devolution, these measures will enable our member transport authorities and their Mayors to make the best decisions for their local communities and continue to invest in good transport services and infrastructure.

“We look forward to working with government on the finer details of specific funding arrangements, and to lock in a longer-term revenue and capital funding settlement for local transport at the Spending Review.”

Road improvements welcomed

RHA MD, Richard Smith, says the continuation of work on major strategic is welcome, but we are concerned about delays and cancellations to other significant road projects such as the Lower Thames Crossing and the A303 Stonehenge tunnel.

He said: “Whilst we await the announcement of RIS3, we urge the government to ensure that it backs new projects that eliminate congestion, connect the country, and unlock economic growth.

“We welcome the additional £500m in the local road maintenance budget allocated for potholes, however it is vital that local authorities receive long term road maintenance funding to enable better planning and scheduling of essential road and pothole repairs. Investment in new and improved roads will reduce congestion and increase productivity.”

On the increase to employers’ costs, Richard said: “Operators are clear the proposed rise in Employers’ National Insurance to 15% from 6 April 2025 will make hiring staff and creating jobs harder.

“We therefore welcome the Chancellor’s commitment to increase the employment support allowance for small businesses by a record amount, more than doubling it from £5,000 to £10,500.”

Richard is concerned about full expensing. He said: “Full expensing has been a transformative tax reform, and the announcement from the last government looking to extend it to leased assets was welcomed by a significant proportion of haulage and coach operators. We are therefore concerned there is no mention of this proposal in the budget documents and will be seeking clarity from the Treasury as to its intentions.”

Fare cap concern

Lee White FCILT, Chair of CILT(UK)’s Bus & Coach Policy Group, said that confirmation of the bus fare cap being retained but at £3 is likely to mean that in urban areas many capped fares will be higher than operators/local authority day tickets.

Lee said: “In rural areas, the benefits to users on longer journeys will remain significant hence why this funding commitment is broadly welcomed. We welcome the allocation of £640m for local authority bus service funding in FY2025/26.

“Although we see no change announced in BSOG (fuel duty rebate) principles we welcome the commitment of £285m to this funding source. We, however, have concern that fuel duties generally will remain unchanged thus perpetuating the artificially low cost of private motoring to continue.

“In the spirit of change promoted by the government we were disappointed that the Chancellor did not offer the opportunity to move bus funding onto similar terms to major road and rail funding where multi-year settlements are the norm.”

The CILT believes that the £500m in new funding for the Affordable Homes Programme, contributing to the broader investment of £5 billion for 1.5 million new homes, will in turn have an impact on transport planning in areas where housing will be built.

Timely decision

Frank Suttie, Director at national law firm Freeths, commented on the changes to the fare cap: “The willingness of the labour government to continue the financial support provided to bus operators across the country (albeit with an increased cost to the travelling public) is an important decision that will ensure continuing stability around bus services across the country.

“The decision is a timely one with the existing scheme due to end on 31 December. Bus operators were being pushed to the limit of their decision-making time frame as any decisions around non-viability of routes that could arise from a complete cancellation of the scheme would have to be made now and not in December for regulatory reasons.

“But equally important is the allocation of £925m to protect existing routes and services with emphasis in particular on services in rural areas. It’s not entirely clear that this is new money – the previous government announced a reallocation of funds earmarked for HS2 towards local transport funding. Much of that funding will already have been committed in funding arrangements with operators and therefor if this is additional funding that will be welcome.

“Exactly how the £925million will be distributed is the big question. The new government has indicated that it is less keen on initiating bidding wars between local authorities and will be looking to find new ways of devolving funding down to local authorities. Quite who gets what share of the funding is the next question local authorities and bus users need to ask.”

Pothole pledge encouraging

Peter Slater, CEO of CMAC Group (parent company of Coach Hire Comparison), is particularly encouraged by the government’s pledge of £500m to improve local roads and address potholes. He said: “Road quality is crucial to ensure safe, reliable and efficient ground transportation across the UK. With better maintained roads, businesses can experience less disruption to both logistics and employee travel, reducing vehicle repair costs and improving safety for all road users.”