The national bus fare cap in England outside London for participating services will be reduced to £2 for 12 months from 1 January 2027.
A drop from the current £3 where operators choose to take part is an early policy point from new Prime Minister Andy Burnham. £400 million of extra funding will go towards the cap in 2027, with the government claiming that without it, single fares “could soar above £10 on some services on the most expensive routes.”
In total, £454 million (including Barnett sums for devolved nations) will pay for the initiative. That will come from what is described as a “reprioritisation” of the Department for Energy Security and Net Zero budget where funding that had been set aside for international climate finance projects will be converted to loans.
Until the end of 2026, the national bus fare cap in England will remain at £3. Previous policy had that staying in place until the end of March 2027. A reduction for all of next year is part of cost-of-living measures taken under the Burnham administration.
The government claims that under the previous £2 cap – which was initially slated to be a three-month exercise at the start of 2023 – an estimated 30 million more journeys were taken by bus in 10 months, although it acknowledges that links in rural and coastal areas remain “insufficient.”
Speaking about the decision, Mr Burnham says: “Good, affordable transport links are essential. No one should be priced out of those and left behind. But for too long, people have said that cheaper transport is not an option. I do not accept that. I have done it before and I will do it again now: a £2 cap on bus fares for millions across the country.
“Lower fares will help people to get where they need to – giving them breathing space to help with the cost of living. As I said on my first day in office – I will build a country for everyone, everywhere. That means more connected communities, better access to opportunities, and a lighter load on people’s lives.”
The Confederation of Passenger Transport has welcomed Mr Burnham’s early focus on bus services and “putting buses at the heart of his government’s cost of living plans,” says Chief Executive Graham Vidler.
Mr Vidler adds that such an approach reflects “the central role they play in British life by connecting millions of people with work, education, healthcare, high streets, and one another.”
However, he also notes that as the fare cap in England enters its fifth year, it is vital for ministers to work with the bus industry “to place [the cap] on a sustainable footing, with a long-term strategy and a fair reimbursement model for every operator choosing to take part.” It will commence discussions with the Department for Transport on that “this week.”
