Prime Minister Andy Burnham has announced that most single bus fares across England will be capped at £2 from January 2027. This move, a key pledge from his "cost-of-living government," will reverse an increase enacted by the previous administration which saw the cap rise to £3.
The policy is expected to cost over £500 million. Chancellor John Healey stated that £454 million of this funding would come from reallocating investments in international climate finance to loans, along with savings from the Department for Energy Security and Net Zero's budget. The remaining funds will come from existing Department for Transport allocations for buses.
The £2 cap was initially implemented by the Conservative government in January 2023 and was set to expire in December 2024. Although the subsequent Labour administration had increased it to £3, Burnham, while Mayor of Greater Manchester, had maintained a £2 limit in his region. Transport Secretary Heidi Alexander highlighted that the measure would make "everyday journeys easier and cheaper" and emphasized that the scheme is fully funded, alleviating concerns about unfunded spending commitments.
An evaluation of the previous £2 cap scheme, which ran for ten months, indicated it contributed to 5% of a 13% rise in bus usage during that period, with lower-income passengers experiencing the most significant financial benefits. This new cap is particularly aimed at assisting passengers in rural and coastal areas where single fares tend to be higher. Initial estimates for the previous scheme were £245 million, but only £210 million was spent, suggesting potential for efficiency in the new rollout.
