Council chiefs have welcomed a transport committee report which supports the right of local authorities to set up their own municipal bus companies.

The Bus Services Bill, which is currently being debated in Parliament, originally proposed to stop English local authorities from setting up new municipal companies.

However, Clause 21 of the Bill—the clause outlining this restriction—was dropped after the House of Lords rejected it.

The transport committee has welcomed the new version of the Bill, which frees councils up to run their own bus services, and said it would give a ‘boost to communities’.

Acknowledging there are some risks with councils setting up their own bus companies, the committee concluded that ‘existing safeguards in the Bill’ would protect against these.

‘In our view, it is primarily for the local transport authority to decide whether or not franchising is appropriate for any particular area and we agree with the majority in the Lords that the process set out in the Bill as introduced is unnecessarily cumbersome,’ the committee report concluded.

‘Councils need to have a bigger say in bus provision so they can help ensure communities get the services they need,’ said Cllr Martin Tett, the Local Government Association (LGA) transport spokesperson.

‘This is why we are pleased that the benefits of the Bus Services Bill are to be available everywhere and, as this Bill currently stands, that all councils will be able to automatically franchise bus services, not just those with directly-elected mayors.’

Cllr Tett also welcomed the removal of Clause 21 and described it as a ‘big step forward’.

Responding to the committee’s report, a spokesperson for campaign group We Own It said: ‘If the government wants councils to be able to negotiate the best deal for passengers, then the option of setting up a new public bus company needs to be on the table.

‘For far too long passengers have been at the mercy of private operators and if they don’t sort their act out it would be absurd if councils didn’t at least think about taking control of bus services by setting up a new bus company to do it themselves.’