Question to the Department for Transport:

To ask the Secretary of State for Transport, if her Department will publish changes in bus funding allocations by local transport authority for 2025–26 and 2026–27.

On 5 December, the Government confirmed investment of over £3 billion from 2026/27 for the rest of the spending review period to support local leaders and bus operators across the country to improve bus services for millions of passengers. This includes multi-year allocations for local authorities under the Local Authority Bus Grant (LABG) totalling nearly £700 million per year, ending the short-term approach to bus funding and giving councils the certainty they need to plan ahead.

The formula used to calculate LABG allocations in 2025/26 was the Government’s first step towards ending competitive allocations and it considered population size, levels of deprivation and the extent of existing bus services. To prevent sharp decreases of funding, and as part of the Government’s effort to rebalance inequalities created by competitive allocations, losses were capped at 25%.

We revised this formula for 2026/27 onwards to give a greater weighting to levels of deprivation and population, and to cap any losses at 5% in our continued effort to end the inequalities of competitive allocations once and for all. The formula now also includes consideration of the rurality of local areas in response to a recommendation from the Transport Select Committee.

Further details on the funding formula and local authority allocations for 2026/27 onwards have been published on GOV.UK at: https://www.gov.uk/government/publications/local-authority-bus-grant-allocations. LABG allocations for 2025/26 are also published on GOV.UK at: https://www.gov.uk/government/publications/bus-service-improvement-plans-local-transport-authority-allocations/total-combined-bus-funding-allocations-2025-to-2026.

In addition to the LABG, the Government has also introduced a £3 million Bus Franchising Fund for Mayoral Combined Authorities that are pursuing franchising to apply for in 26/27, such as Liverpool City Region, to help support their transition to franchised services.