Local transport authorities (LTAs) in England outside London will get £640 million of funding to support and improve bus services in FY2025/26 via what is understood to effectively be a continuation of the current Bus Service Improvement Plan approach.
That sits alongside £151 million allocated to continuing the national bus fare cap in England at £3 in 2025, and £285 million to Bus Service Operators Grant (BSOG) in FY2025/26 to continue and protect existing services. Amounts of LTA-specific funding as applicable will be set out in November.
The Department for Transport (DfT) has outlined the value of each stream, but in a muddled announcement it also says that £925 million – the sum of the BSOG and LTA allocations – will be open to use by local authorities to improve and protect services.
Nevertheless, the streams equal almost £1.1 billion of bus service and bus passenger funding in England outside London to the end of FY2025/26. LTAs will be able to use their allocations to introduce new routes, improve frequencies, and secure existing provision.
Confirmation of the funding outlook follows Prime Minister Keir Starmer revealing that the national bus fare cap will be maintained in 2025 at £3 after speculation that it was to be abandoned entirely when its current allocation expires on 31 December.
The Department for Transport (DfT) acknowledges that had the fare cap come to a hard stop at the end of 2024, bus provision would have been put at risk “across the country.” It says that with the cap at £3, fares beneath that level “will only be allowed to increase by inflation in the normal way.”
On the future of the bus fare cap in England after 2025, the government will explore “more targeted options that deliver value for money to the taxpayer to ensure that affordable bus travel is always available for the groups that need it the most – such as young people.”
An industry source earlier told routeone that scope for a young people’s fare cap to begin in H2 2025 had been floated under a previously suggested approach that would have seen the adult cap rise to £2.50 for H1 before lifting to £3 for the remainder of next year.
The overall funding outlook is again cited by DfT as part of plans “to end the postcode lottery of bus services,” although industry calls for a multi-year strategy on its allocation appear to have again gone unheard.
Key to that government work on bus services it the Buses Bill, which will expand franchising powers to non-mayoral combined authorities. Secretary of State for Transport Louise Haigh describes that change as a “bus revolution.”
