West Midlands mayor Andy Street is to spend nearly half of the region’s bus service improvement cash on subsidies to private sector operators, following a deal with ministers.

Transport for West Midlands (TfWM) announced that services across the region will continue to operate ‘at near current levels’ until the end of 2024 following an agreement between itself, bus operating companies and the government.

Under the agreement, TfWM, which is part of the West Midlands Combined Authority (WMCA), has re-allocated £40m of the region’s £88m Bus Service Improvement Plan (BSIP) grant to keep services running ‘while a long-term sustainable funding solution is found’.

TfWM said that with operators having faced increasing cost pressures over the last two years and ‘struggling to keep buses on the road’ following the end of Government Covid support funding in June, the deal heads off the immediate threat of around a third of the region’s bus services being withdrawn or frequencies reduced.

Mr Street, who led talks with the bus companies and Government to secure the agreement, said: ‘Buses are the backbone of our public transport network. That’s why we simply could not allow a substantial reduction in services and I personally made the case on behalf of our region during intensive discussions with the likes of National Express West Midlands and Government.

‘By stepping in and arranging this funding package to maintain bus service provision, we’ve successfully secured much needed certainty for the network all the way through to the end of next year.’

Alex Jensen, CEO of National Express UK & Germany said: ‘We welcome the support from Transport for West Midlands which will ensure we can maintain the bus network at the current level until the end of 2024.’

TfWM said it is still on course to invest in improved bus priority and more electric and hydrogen buses.

The bailout is on top of the approximately £16m that TfWM spends annually subsidising buses which are deemed socially necessary but not able to operate on a commercial basis.

It also follows a fare increase in July to ‘reduce the cost pressures on bus companies’, with the price of a day ticket rising from £4 to £4.50. There will be a review of contracted bus services during October, which TfWM said could result in some routes being reduced or withdrawn.

This article first appeared on Transport Network.