Prime Minister Andy Burnham announced that the bus fare cap in England will be reduced to £2 starting in January 2027, representing a reversal of the previous increase to £3. The policy is projected to cost more than £500 million and will apply to participating buses outside of London. The government framed the measure as a cost-of-living initiative designed to provide financial relief during a period of elevated living expenses.
Transport Secretary Heidi Alexander stated the reduction would offer assistance to individuals facing increased expenses, particularly following rising fuel costs. She acknowledged, however, that the measure alone would not fully address affordability concerns. The Burnham administration indicated the policy should provide particular benefits to passengers in rural and coastal regions, where fares historically have been higher.
The previous Conservative government implemented a £2 cap in January 2023, which was initially temporary but was extended. As mayor of Greater Manchester, Burnham had introduced a similar £2 cap in September 2022 using central government funding. An evaluation covering the scheme’s first ten months found it contributed to a 5% increase in bus usage and particularly benefited lower-income passengers, though assessments of value for money were less favorable.
The government stated it will fund the policy by reallocating £454 million from the Department for Energy Security and Net Zero, which had been designated for international climate initiatives. According to Alexander, these funds will be issued as loans rather than grants, enabling their reallocation. Shadow Chancellor Mel Stride raised concerns about the funding transparency, questioning how the government would finance its various spending commitments.
Bus usage outside London reached approximately 1.9 billion journeys by March 2025, representing about 93% of pre-pandemic levels, indicating the sector continues recovering from Covid-related disruptions.
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