Question to the Department for Transport:

To ask the Secretary of State for Transport, pursuant to the Answer of 3 March 2016 to Question 28183, using what evidence base his departmental economists (a) normally assume operators pass subsidy received on to passengers at a rate of 50 per cent through lower fares and at a rate of 50 per cent through increased service levels and (b) estimate that the Bus Service Operators' Grant has the effect of keeping fares 3 per cent lower in England outside London.

The department assumed that the Bus Service Operators Grant (BSOG) was passed on to passengers 50% through lower fares and 50% through increased service levels as a working assumption made in the absence of better relevant evidence. The estimate of the effect of keeping fares lower as a result of BSOG was derived by using the National Bus Model, which combined assumptions based on the evidence available with actual data on passenger numbers, fares and service levels.