Bus Industry income driven by state funding growth

Public funds account for almost 50% of bus revenue in 2023/24

Public spending on bus services and their passengers accounted for 49.8% of the industry’s income in 2023/24, according to our analysis of figures published by the Department for Transport (DfT) and the Ministry of Housing, Communities and Local Government (MHCLG).

Total industry income for operations in England outside London was £3.67 billion in 2023/24, up by 9.8% in cash terms on a year earlier, and 8.8% ahead of the last pre-Covid year, 2018/19. The total comprised:

• funding via local government (12.4%)
• three forms of direct funding from the DfT in the form of BSOG (5.7%)
• BSOG+ (5.6%)
• reimbursement for the £2 fare cap (7.6%).
• concessionary fares reimbursement (18.5%)
• income from fare-paying passengers (50.2%).

The fares income totalled £1.84 billion, 1.5% down on the previous year’s £1.87 billion. Fares income accounted for 50.2% of total income in 2023/24, down from 56.0% a year earlier and 62.2% in 2018/19. The shift is mainly the result of the DfT’s £2 fares cap, for which the government reimbursed operators to the tune of £279m during the year (up from £60m for the three months in which the scheme operated in 2022/23). Adding the two together gives a figure of £2.12 billion, up by 9.9% from the previous year’s £1.93 billion.

The DfT’s own spending on post-Covid support – routed through BSOG+ in 2023/24 – totalled £206m. This was 34.6% up on the previous year’s Bus Recovery Grant figure of £153m. Spending on the original BSOG scheme totalled £210m, up by 4.6% but still 15.3% down on 2018/19 levels. This reflects the 17% reduction in mileage run since 2018/19.

Meanwhile, gross revenue support from local government increased sharply, up by 18.1% to £623.9m, up from £528.3m the year before. After deducting revenue accruing to LTAs from gross cost tendered services, the net spending on support was £455.1m, 23.9% up on the previous year’s £367.2m. The increases reflected the availability of BSIP and BSIP+ funding to the authorities. This figure also included spending by some authorities on their own £2 fare cap scheme. The flow of BSIP funding is also reflected in a two-thirds increase in capital spending by local authorities on bus projects during the year, which totalled £388m.

Reimbursement to operators for free concessionary travel fell by 1.9% to £677m. The total here is now 11.2% down on the 2018/19 figure of £762m. This reflects the lower travel volumes by passholders since the pandemic. In 2023/24, passenger journeys by passholders remained 35.4% below pre-Covid levels.

The details of the spending are shown in the table below.

Bus Industry Income – England Outside London (Current Prices, £000)

Bus Industry Income – Percentage Breakdown

 The Non-Metropolitan (Shire) areas took the bulk of the industry support spending, accounting for around 64% of the total in both years, whilst the Metropolitan Combined Authorities accounted for 36%. This calculation includes our own estimates for apportionment of the fare cap spending (based on passenger km travelled) and the other DfT funding (based on kilometres run), since none was provided in the DfT statistics. Metropolitan Combined Authorities saw the higher spending increase over 2022/23, at 27% compared with 21.9% in the shire areas.

Meanwhile, in London, TfL’s revenue support for the network increased by 1.2% to £807m, with concessionary fares reimbursement also rising, by 4.8% to £147.1m. Fares income, meanwhile, moved ahead by 10.7% to each a total of £1.34 billion. This enabled the proportion of revenue coming from fares to be increased from 56.4% to 58.4%, though it remains below the 60.5% seen in 2018/19.

Adjusting for Inflation

The DfT also publishes figures adjusted for inflation, using their preferred measure of the GDP Deflator. This shows that industry income in 2023/24 was 10.5% down since the last pre-Covid year. Support via local government was 42.2% higher, whilst BSOG was 30.4% down. Taken together, public sector support for operators increased by 85.1%. Concessionary fares reimbursement was 26.8% lower, whilst income from passengers was 27.8% down. The figures are shown in the table below.