Could we make buses free for everyone?

There is much discussion these days about Universal Basic Income – OK, perhaps only amongst policy wonks. It’s a simple idea that aims to address social inequality by giving every citizen an income, like a pension, for life. Though attractive in many ways, it faces many practical and social objections.

A less well known alternative is Universal Basic Services, promoted in particular by the UCL Institute for Global Prosperity (IGP). It proposes extending free education and healthcare to other essential services, giving everyone access, if and when they need it, to free food, housing, transport and digital connectivity.

That might be a more achievable ambition than UBI, with a lower likelihood of perverse outcomes. It would also be considerably cheaper: £42bn v £250bn annually, according to IGP. What about simply making buses free?

Those over retirement age or qualifying for certain benefits are already entitled to a free bus pass to travel off-peak. What would it cost to extend this to everyone? IGP estimate £5.2bn for the whole UK population, which works out at £63m for Cambridgeshire and Peterborough. That would mean economically active people paying £200 per year on average (about the same as a basic mobile phone contract) to give everyone free bus travel.

Does this mean we’d get better bus services? Yes, because money would automatically follow demand. Services could in theory continue to be operated in a deregulated market. But, for other reasons we’ve covered before, co-ordinated planning of services is the only way to achieve seamless integration and comprehensive coverage.

If people can travel for free at any time, some will choose to travel at peak times when they don’t need to. This would disproportionately increase the cost of provision because public transport costs are determined largely by the resource (vehicles, drivers and road/track capacity) needed to meet peak demand. The obvious answer is to charge a supplement to use peak-time services. It would also be fair to charge visitors who don’t pay national taxes, perhaps rolled into a hotel bed tax – as happens in Switzerland.

Could this save our buses?

This article was first published in the Cambridge Independent on 12 September 2018.