Bus Cuts, Big Costs: The Economics of Neglecting Public Transport

Bus services have long been the unsung heroes of local economies, quietly ferrying millions to work, education, and community life. Yet, in England’s most deprived areas, bus services have been disproportionately slashed, amplifying economic inequality. A recent IPPR North report highlights the startling gap: residents in the most deprived areas faced ten times the reduction in bus miles compared to their wealthier counterparts.

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The Economics of Bus Cuts

At first glance, reducing bus services may seem a minor inconvenience. However, the economic ripple effects are profound. With fewer buses, many turn to cars and taxis, resulting in an estimated 1.1 billion additional miles driven in 2023 alone. This shift imposes externalities: increased congestion, air pollution, and carbon emissions. The costs, both financial and environmental, fall on everyone, with low-income households bearing the brunt.

Bus cuts also hinder access to jobs and education, particularly for those without private transport. This lack of connectivity entrenches economic disparities, perpetuating cycles of poverty.

Lessons from Greater Manchester

In stark contrast to widespread decline, Greater Manchester’s Bee Network offers a roadmap for revival. By adopting a franchised model, the region brought its bus services under public control, prioritizing accessibility, affordability, and sustainability. The results are encouraging: a 5% rise in ridership in the first year and a significant boost in service reliability.

Franchising allows local governments to integrate services across modes of transport, ensuring smoother connections and consistent pricing. Importantly, it aligns transport policy with broader goals like reducing emissions. Greater Manchester’s ambitious target to achieve a fully electric bus fleet by 2030 exemplifies how local control can drive green innovation.

The Policy Opportunity

The government’s proposed "Better Buses Bill" aims to empower local authorities to adopt franchising models, following Greater Manchester’s lead. However, achieving this vision requires more than legislation. Funding stability is essential. Short-term grants, while helpful, do little to build the capacity needed for long-term transformation.

Moreover, transport authorities in other regions often lack the expertise and resources seen in Greater Manchester. Addressing this disparity through national support programs could democratize access to effective bus franchising.

A Path to Prosperity

Buses are more than a mode of transport—they are a lifeline for communities and a catalyst for economic growth. Investing in buses can boost productivity by connecting workers to jobs and consumers to businesses. Furthermore, shifting from car dependency to public transport can help meet the UK’s ambitious net-zero targets.

As Greater Manchester demonstrates, better buses are possible. The question is whether policymakers will seize the opportunity to replicate this success nationwide.

Graham Watson's insight:

The nature of poverty is multi-faceted and this is another example of how access to public services is a determinant of poverty. In this case, the IPPR North has analysed cuts to bus services, noting that they are disproportionately higher in the most deprived areas of the country, such as Merseyside. Indeed, some areas have seen ten times as many bus miles lost compared to the most affluent areas. This is important because it reduces labour mobility, and job opportunities for some of the country's most vulnerable citizens.

Glossary of Economics Terms

1. Externalities: Costs or benefits of an economic activity experienced by third parties, such as pollution from additional car journeys.
2. Franchising: A system where public authorities manage and oversee bus services, contracting private operators to run specified routes.
3. Net-Zero Target: A goal to balance greenhouse gas emissions with removal or reduction measures, achieving a neutral impact on the climate.
4. Productivity: The efficiency of production, often measured as output per worker or per hour worked.
5. Public Goods: Goods or services that are non-excludable and non-rivalrous, meaning they are available to all, like clean air or street lighting.
6. Devolution: The delegation of decision-making powers from central to local governments.
7. Sustainable Transport: Modes of transportation that have minimal environmental impact, such as buses powered by electricity.