13

Competitive bus grant allocation leads to unequal funding, failing to consider rurality.

Recommendation
The Department’s decision to allocate some grants competitively has meant funding per person varied significantly. On average, mayoral combined authorities received significantly more bus service improvement funding (£34 per person) than county councils (£19 per person).27 We asked the Department how it was going to make its funding fairer. The Department told us that it is now using a formula to allocate funding, which is based on levels of deprivation, population and bus network size to distribute grants more equitably, and noted that this means many rural areas receive 19 Qq 64, 67 20 Qq 2, 67 21 C&AG’s report, para 2.13 and Figure 9 22 Qq 29, 35; C&AG’s Report, para 14 23 Qq 38, 67 24 Qq 35, 44 25 C&AG’s report, para 2.16 26 Qq 44-45 27 C&AG’s report, para 2.14 11 higher amounts.28 However, despite the challenges of running bus services in rural areas, the Department told us rurality is not one of the factors it specifically considers in its formula, though it might do so in the future.29
Government Response

A response document is linked to this report, dated 19 January 2026. Response attribution to this conclusion has not been verified. Read the response document.

Addressee Bodies
HM Treasury
Timeline
Recommendation age 0.9 yr
Report published 29 Oct 2025