Local transport authorities (LTAs) in England will collectively receive almost £700 million in capital and revenue funding for bus services each year to FY2028/29 under a continuation of the multi-year Local Authority Bus Grant mechanism.
That continues the approach adopted in FY2025/26 and brings Bus Service Improvement Plan and local authority BSOG money into a single grant. The allocations can be spent by LTAs “however they want,” DfT says. That may include on lower fares, introducing new routes and zero-emission buses, or improving passenger infrastructure.
DfT notes how authorities have long been held back from making long-term investments in buses, “but multi-year settlements will finally give the much-needed certainty to develop and drive forward plans that cater to the needs of their communities.”
Announcement of the further allocations follows the Bus Services Act passing into law in October. That legislation gives LTAs “the power to run local services how they see fit and provides greater protection to socially necessary routes,” DfT notes.
Secretary of State for Transport Heidi Alexander says that the money forms part of wider government plans to make public transport cheaper across England and sits alongside a freeze to regulated rail fares.
From FY2026/27 to FY2028/29, revenue funding allocated to LTAs is £1.44 billion, which sits alongside £820 million of capital money. FY2025/26 has already seen £467 million and £245 million for those streams, respectively, to give a total bus allocation from FY2025/26 to FY2028/29 of almost £3 billion. Individual location authority allocations can be found here.
Consolidation of all LTA bus funding in England into one pot will give greater control to local leaders to decide how buses are run, continuing what the government says is a commitment to ensuring that happens “for people, not profit.”
The Local Authority Bus Grant money is in addition to that provided via either the City Region Sustainable Transport Settlement (CRSTS) and its successor the Transport for City Regions (TCR) fund, or the Local Transport Grant.
Authorities receiving CRSTS and TCR allocations are not eligible for the capital component of the Local Authority Bus Grant. DfT adds that over £240 million of revenue funding per year will go to operators.
Alongside the multi-year funding is a £3 million Bus Franchising Fund. It will see one-off payments made for FY2026/27 and is open to all Mayoral Combined Authorities that are pursuing franchising.
Speaking about the approach, Confederation of Passenger Transport Chief Executive Graham Vidler says: “The time for buses is now. With multi-year funding finally in place, local transport authorities must get moving and invest in what matters most to passengers: more buses, faster buses, and more reliable buses.
“Operators stand ready to work closely with authorities across the country to turn this funding into real improvements for the communities we serve.”
Bus Users UK has also applauded the confirmed allocations. CEO Lydia Horbury describes it as “extremely welcome” news and says that long-term planning from LTAs on bus services is critical “if we are to reverse decline and rebuild confidence in bus travel.”
