Spending cuts: A worrying time for the bus industry

Spending cuts come as new coach and bus minister in place

Liz Truss’s failed administration will surely go down in history as one of the ineptest on record. It will certainly go down as the shortest. Yet the extraordinary aspect of the collapse of Kwasi Kwarteng’s mini-Budget was that it was not all that controversial, because many aspects of it had been well trailed during the Conservative party’s leadership contest.

Despite the outrage expressed about abolishing the 45p top rate of income tax, it is worth remembering that this tax rate did not even existing during most of the Labour party’s period in office from 1997 to 2010. Labour even supported many of the mini-Budget’s proposals.

In itself, the mini-Budget was thus not that outrageous. But if ever you wanted evidence that sometimes governments are not in control of their own destinies and that the money markets can wield extraordinary influence, this was it.

Sunak gets the top job after all – but what of Hunt?

So Rishi Sunak ended up becoming Prime Minister after all. It is worth noting that Jeremy Hunt, despite being knocked out of the leadership contest in the first round of voting by the parliamentary party after Boris Johnson’s resignation in receiving just 18 votes, is now the second most powerful politician in the country. How the political wheel of fortune can change.

The markets have calmed down and some semblance of political stability has been restored, although there are doubtless very bumpy times ahead for this Conservative government.

The media has been full of grim stories about tax increases and spending cuts to come in the autumn fiscal statement of 17 November. The extent of the wicket rolling that the government has been doing to prepare us for those measures is surely a sign that times are going to be tough for a while to come.

DfT ministerial changes include new holder of coach and bus remit

Meanwhile, with a new Prime Minister, so we have a suite of new ministers at the Department for Transport (DfT). The new Secretary of State, Mark Harper, will be an unknown quantity to the transport industry, and there is no evidence that he has that much interest in the sector.

But the two new Ministers of State, Jesse Norman and Huw Merriman, will be well known to many in the industry. Jesse Norman was a minister at DfT from June 2017 to November 2018, while Huw Merriman is a very familiar figure, having been a member of the Transport Select Committee since 2015 and its Chair since 2020.

For the bus industry, however, news that Baroness Vere no longer holds the local transport and coach and bus brief, which has been passed to the other new arrival at Great Minster House Richard Holden (pictured, top), may be a touch frustrating.

Whatever the industry may think about the general direction of bus policy, at least Lady Vere had developed a strong understanding of the issues, even if at times she seemed to me to be in denial, at least publicly, about the scale of the funding challenge the industry faces. Now a new minister must learn the brief all over again, although he will at least have Lady Vere on hand to provide guidance.

New coach and bus minister: Spending cuts to grapple with

Richard Holden was only elected at the 2019 general election, winning the previously safe Labour seat of North West Durham.

But he will have a strong understanding the workings of Westminster and Whitehall, having been a Special Adviser to a string of Secretaries of State, including briefly to Chris Grayling in 2018/19 when Mr Grayling was Secretary of State for Transport before moving off to help with Boris Johnson’s bid for leadership of the party. So perhaps buses won’t be entirely alien territory for Mr Holden.

That may be just as well, as he is going to have to grapple with the continuing funding crisis that haunts the bus industry. In her brief stay as Secretary of State for Transport, Anne-Marie Trevelyan did manage to appear before the Transport Select Committee, and it was striking that buses barely featured during a general session on the overall work of DfT.

When buses were covered, Ms Trevelyan failed to provide any guarantee that there would be a second round of bidding for funding through the Bus Service Improvement Plan (BSIP) mechanism in England, saying only that the Department would get back to the Committee on that issue.

Spending cuts potential to impact bus service provision
Less than half of all Bus Service Improvement Plans were funded – what impact will spending cuts have on further money coming available?

It sounds to me that a second round of BSIP funding is in real doubt, which makes a bit of a mockery of the National Bus Strategy and how it made clear that BSIPs should be updated annually.

But what is the point of such an update if there is no guarantee of funding?

It seems pretty clear that ministers are going to have some difficult decisions over the coming weeks as to where spending cuts have to be made. For transport, where will ministerial priorities lie?

Will cuts to spending see bus prioritised in transport?

Would it make sense, for example, to carry on with developing proposals for high-speed rail north and east of the West Midlands – projects where construction is many years away – when funding to keep buses running today may not be forthcoming?

I can see that rural communities in the South West, as a further example, may take a dim view of spending cuts impacting bus services when billions are going to a high-speed railway that has, at best, a marginal business case and will not see the light of day for years to come. The new ministerial team is going to find out very quickly that there are some difficult choices to be made.

One final comment on Huw Merriman’s appointment. It means that there will have to be a new Chair of the Transport Select Committee. As I write, five Conservative MPs have thrown their hats into the ring, so a ballot will now take place on 15 November.

More interestingly, it means that Huw Merriman must now appear before the Committee as a minister to give evidence on aspects of his policy portfolio. I am rather looking forward to seeing how he feels being on the other side of the table. It could be quite entertaining!