Kickstarting economic growth

City regions are the key to improving the UK's wider economic competitiveness. Integrated public transport, walking and cycling networks enable people, places and businesses to reach their full potential. 

In our city regions, there simply is not the space to continue to expand road capacity to accommodate growth. Without a high-quality public transport network, even a small increase in development, housing or economic activity will lead to a more than proportional increase in congestion, which can quickly escalate, capping economic growth and agglomeration potential. 

Peak time congestion in the UK is more severe than in any other European country, largely due to an under-provision of public transport. Just 40% of residents surrounding Britain’s largest cities are able to travel into city centres using public transport in 30 minutes. This compares to almost 70% of residents surrounding similar-sized European cities. This lack of connectivity costs the UK economy more than £23.1bn per year.  

The National Infrastructure Commission warns that economic growth in some of England’s largest cities is likely to be constrained over the next 20 to 30 years unless they can increase capacity on their public transport networks and reduce car journeys into city centres.  

Accelerating the transition to net zero

At 26% of greenhouse gas emissions, transport remains the largest emitting sector in the UK. Within that, cars and taxis are the largest contributor to domestic emissions, at 57%.  

Net zero cannot be achieved without the urgent decarbonisation of transport and ensuring that travel by public transport, walking, cycling and wheeling is the desirable first choice for most everyday journeys. 

Our recent report ‘A Smoother Ride: Unlocking a green bus revolution’ shows that around 15,000 buses operating in England’s major cities will need to shift to zero emission operation by 2036 if city regions are to hit their ambitious net zero targets. Investment is needed urgently to secure the benefits that zero emission buses can deliver. 

Meanwhile, some 71% of all trips are under five miles and 46% of trips are under two miles. People should have attractive options to complete these short, everyday journeys using the greenest, most efficient modes. 

Green benefits can be multiplied still further by ensuring the energy supply powering public transport is clean and renewable. For example, the tram networks in Manchester and Nottingham both run on 100% green, renewable energy. Commitment such as this from public sector large-scale consumers of electricity helps support the further growth of renewable energy, which in turn has a wider benefit as the nation seeks to position itself as a green energy superpower.

Breaking down barriers to opportunity

Transport has a vital role to play in connecting people to opportunities and improving quality of life. The transport choices that people are enabled to make have a significant impact on their ability to fully participate in society.  

Some 22% of households in England do not have access to a car, rising to 40% of households in the lowest income quintile. For those without car access, walking is the main mode of travel, followed by bus.  

A 10% improvement in access to bus services would mean 50,000 more people in work. In the 10% most deprived communities in England alone, research by the University of Leeds finds that a 10% increase in local bus service would: 

• Reduce income deprivation by 2.8%, increasing the income of 22,647 people 
• Reduce employment deprivation by 2.7%, meaning 9,909 more people in work 
• Increase adult skills by 1.4%, or 7,313 more people with adult skills 
• Reduce life years lost by 2,596 years 

Investing in the future of bus services, together with measures to make it easier, safer and more attractive to walk, cycle and wheel, is an investment in social equity and helps to bring down the cost of living.

Keeping people safe and healthy 

People’s transport choices have a direct impact on health. The ability to choose to walk, cycle or use public transport is an easy way to ensure everyone can be more active every day. Some 34% of public transport users achieve their recommended 30 minutes of daily exercise in the course of their journeys.  In addition, more walking, cycling and public transport use means cleaner air and safer, more liveable streets. 

Research on behalf of DfT found that each £1 invested in walking and cycling delivers an average of £5.60 of benefits, mostly from the health benefits and associated lower costs to the NHS. If each car user switched just one journey per month from car to bus by 2030, rising to two journeys per month by 2050, the health benefits (primarily from reduced traffic collisions and increased physical activity) would be in the region of £15bn. If zero emission buses were used, health benefits would be multiplied still further as communities would benefit from cleaner air. 

To be able to choose to use public transport, or to walk, cycle or wheel, people must feel that these spaces are safe for them. The work of the Transport Champions for Tackling Violence Against Women and Girls, for example, highlighted personal safety concerns as a significant barrier preventing women and girls from choosing these modes for more of their journeys. Investment in transport supports work to keep our streets, vehicles and infrastructure safe, ensuring everyone feels welcome, protected and respected.  

1. Extend vital bus revenue funding support 

A number of key sources for bus revenue funding are set to end in April 2025 or remain unconfirmed, namely Bus Service Improvement Plan funding, Bus Service Operator Grant Plus and the National Fare Cap.  

These are vital to safeguard, sustain and ideally enhance our vital bus networks. We ask that these are extended to April 2026, providing a bridge to the Spending Review, which should establish a sustainable, long-term funding settlement for bus. 

2. Confirm long-term capital and revenue funding for the city regions and London

We ask for confirmation of the indicative City Region Sustainable Transport Settlements (CRSTS) 2 uplift funding allocations for 2027/28 to 2031/32, and the capital and revenue split. CRSTS funding is the primary source for investment in transport infrastructure to drive growth, support net zero and create great places. Without confirmation of the next funding phase, planned transformational projects simply will not happen or will reduce considerably in scope. There is no other capital funding on this scale that could be generated locally to fund the projects. 

Transport for London, which sits outside of CRSTS, also requires funding certainty and a commitment to working towards a settlement to maintain and renew its transport assets.

Finally, a commitment to a explore longer-term funding streams for the delivery of Zero Emission Buses is required if we are to meet ambitious fleet decarbonisation targets. 

3. Continue support for devolution and commit to explore fiscal devolution 

In the longer-term, we wish to see the development of consolidated, devolved long-term funding settlements to transport authorities, starting with a long-term revenue settlement for bus. There should also be a commitment to providing city regions with greater fiscal devolution as part of the Spending Review.  

This would provide much needed certainty to enable city regions to plan transport investment strategically and use their local knowledge to ensure it meets the needs of the people and places served, maximising the value of every £1 spent. 

Devolution – bringing transport decision making closer to the communities it serves 

Decision making at local level is agile, swifter and more able to proactively identify, and dynamically respond to, changing passenger behaviours and market conditions.  

With their in-depth knowledge of their people and places, Combined Authorities are ideally placed to join the dots between different policy areas, plans and funding. They can ensure that local transport networks are fully integrated, offering a seamless experience for passengers.  

Given that increasing numbers of Combined Authorities are pursuing bus franchising, enabling them to plan and specify their bus services, it makes sense for them to have the devolved powers and funding they need to shape a fully integrated local transport network with communities at its heart.  

Beginning with a single settlement for bus funding, the ultimate goal should be to move towards departmental-style single settlements, as is being explored with Greater Manchester and the West Midlands. This will allow local areas to decide where money should be spent to achieve maximum value for people and places. The Spending Review will need to map out how city regions can be equipped with the fiscal levers they need, including opportunities to raise revenue locally, setting them on a path to financial sustainability. 

Bus – securing a long-term single settlement 

The bus is the most used form of public transport, relied upon by millions of people every day. And yet, it’s future has been continually in peril, a victim of short-term funding settlements, declining local authority budgets and the need, in a largely commercial environment, to balance profit against the needs of communities.  

The Buses Bill is set to enable more places to specify and control their bus networks, more easily. It makes sense that bus revenue funding should also be devolved to enable local areas to decide where it can be put to best use and to specify the exact outcomes they wish to see.  

We urgently need a path to a long-term, devolved single settlement for bus revenue funding. The Spending Review provides an opportunity to set this in motion as a first step towards departmental-style single settlements, offering maximum autonomy for local areas. 

Rail – enabling integration to put passengers first 

With the Government’s target to place passengers at the heart of the railway, democratically accountable Mayors and transport authorities provide a direct line to those passengers, their needs and priorities.  

Mayors and city region transport authorities are uniquely placed to ensure rail fully integrates with both wider public transport networks and plans for the economy, housing, skills and net zero.  

It makes sense that city region bodies which are tasked with planning and delivering economic growth, increased employment, housing targets, net zero and access to opportunity should also have greater control over the transport networks that are key to enabling those tasks and ensure they deliver maximum value and return on investment.  

With bus franchising plans progressing at pace, devolved powers, funding and influence on rail remains the missing piece of the puzzle that will be needed to deliver fully integrated transport networks that truly serve their communities.  

Walking and cycling – turning the tide 

Enabling more people to choose to walk, cycle or wheel for more of their journeys is key to creating liveable, investable places; promoting good health and accelerating towards net zero.

To realise the true potential of these modes, we need to ensure they are the first choice for local journeys. This means providing safe and attractive infrastructure. Without it, many people will continue to face barriers to travel, essentially ‘if we don’t build it, they won’t come’. Despite high legally binding targets for growing walking and cycling, funding levels have yet to match that ambition and, indeed have faced severe cuts.  

The Spending Review must explore how to turn the tide, and given the difficult fiscal environment, examine how local and Combined Authorities can maximise the benefits of the funding they have to ensure more people can choose to walk and cycle every day.   

Light rail – realising the potential 

Light rail is a convenient, attractive and sustainable transport option, providing high-capacity rapid transit, proven to facilitate economic growth. Light rail systems can carry up to 4,000 people per direction, per hour, equivalent to 2,500 cars but using a fraction of the space. It can unlock new development sites bringing housing, jobs and growth – from London’s Docklands to Salford Quays. 

However, the extent of light rail networks in our city regions lags far behind our European counterparts, reducing the effective size of our cities and hampering productivity. Our members have ambitious plans to extend light rail and build new systems, including for Leeds, the biggest city in Western Europe without a mass transit system.  

The Spending Review must recognise the huge potential of light rail to unlock economic growth, placing it on a sustainable financial footing and committing to invest in its future development.