New funding deal to prevent cuts to West Midlands bus services set to be agreed

Members of the West Midlands Combined Authority (WMCA) Board are set to approve the extension of the Bus Network Support Grant, which comes to an end on December 31.

If agreed, the scheme, which gives financial support to operators, will be extended for a further 15 months.

Transport for West Midlands (TfWM) provides a subsidy of circa £50 million per year to ensure around 30 per cent of existing services remain in operation.

A report to the Board, which meets on Friday (November 14) said TfWM also provides a further subsidy for around 12 per cent of services.

It said: “Since the start of the Covid-19 pandemic Local Bus Operators have been financially supported through National and Local funding to maintain their commercial bus networks.

“In the West Midlands this funding has been devolved since 2021, and is now

passported through the Integrated Settlement, enabling WMCA to implement its own Terms and Conditions to reflect local requirements and support the delivery of franchising.

“Without on-going support from 1st January 2026, the bus network in the

West Midlands will again risk significant service reductions which has the potential to cause serious social and economic suffering for the region’s residents and businesses and create an unstable network whilst we proceed to deliver a franchised bus network.

“Whilst TfWM subsidises around 12 per cent of the network through tendered contracts, a further significant portion (around 30 per cent) of the network is at risk and fares face steeper increases.

“The funding support provided by TfWM is, in the main, derived from

additional Government funding provided through the local bus grant (formerly Bus Service Improvement Plan and Bus Service Operating Grant Plus).

“TfWM have continued to optimise the network which has resulted in some minor service reductions, but we have also been able to stabilise the network in preparation for the transition to a franchised bus system through the grants.

“Continued grants also helps to mitigate any significant commercial increase in fares by bus operators as we transition from a de-regulated system to a franchised system.

“These complex negotiations are underway and ongoing.

“Assuming a successful outcome to negotiations this report seeks the agreement of WMCA Board to approve the continued use of Network Support Grants for up to 15 months for the period from 1st January 2026 up to 31st March 2027 inclusive as per recommendation 1 of this report, subject to the necessary agreements, approvals, business case, and subsidy control referrals.”