Prime Minister Andy Burnham has announced that single bus fares across England will be capped at £2 from January 2027. This move, a key cost-of-living intervention, will reverse an earlier increase to £3 put in place by the previous Starmer administration and is expected to benefit millions of people by slashing fares by a third. The initiative aims to make everyday journeys easier and cheaper, particularly for those in rural and coastal areas where fares can be higher.
Funding for this scheme totals more than £500 million. Approximately £454 million of this will come from reprioritizing existing government budgets. Specifically, £400 million will be reallocated from international climate finance grants, which will now be offered as repayable loans instead, with the remaining funds coming from savings within the Department for Energy Security and Net Zero budget. The overall cost will also include existing Department for Transport funding allocated to buses.
The previous £2 cap, in effect from January 2023 to December 2024, saw an estimated 30 million additional bus journeys during its 10-month run. Transport Secretary Heidi Alexander confirmed the funding is secure, stating that the reallocated money from international climate projects would otherwise be given as grants to other countries. Chancellor John Healey emphasized that the measure is fully funded through savings elsewhere, ensuring no additional burden on British taxpayers.
