Question to the Department for Transport:

To ask the Secretary of State for Transport, what steps she is taking to ensure (a) value for money and (b) public accountability where Local Transport Authorities choose to establish municipally owned bus operators under the Bus Services (No. 2) Bill.

Repealing the ban on establishing new local authority bus companies (LABCos) will give local leaders the freedom and flexibility to establish a bus company that matches the needs of their passengers, their aims and ambitions for the network, and the available funding.

The decision to establish a LABCo should be underpinned by a thorough assessment of value for money, and a rigorous approach to financial and resourcing planning. The responsibility for monitoring investments, expenditure, accounting and auditing lies with the parent authority. There should be ongoing assessment of risks relating to the business, supported by processes to ensure that risks are managed as part of the authority’s overall risk management approach, with appropriate escalation and reporting.

Local authorities cannot take on any borrowing unless it is affordable. This is a statutory requirement, and any local authority owned company should be self-financing at a minimum.

LABCo operations and financial management are underpinned by statutory guidance from the Chartered Institute of Public Finance and Accountancy. Detailed guidance on local authority company management and auditing is provided in the Local Authority Company Review Guidance, published by Government, and the Local Authority Good Practice Guide published by the Chartered Institute of Public Finance and Accounting.