Prime Minister Andy Burnham has announced that the bus fare cap in England will revert to £2 starting in January. The government stated that the policy, which is expected to cost more than £500m, is intended to assist with the cost of living and provide citizens with necessary financial breathing room. This initiative follows the previous Labour government's decision to raise the cap to £3 at the start of last year, although Manchester and Liverpool had maintained the £2 rate during that period.
Transport Secretary Heidi Alexander described the measure as a way to offer a sense of hope during a difficult period, particularly as many households grapple with increased living costs following the spike in fuel prices caused by the US-Iran war. While acknowledging that the cap is not a complete solution, Alexander emphasized its importance alongside the Prime Minister's broader efforts to lead a "cost of living government." During his first cabinet meeting on Tuesday, Burnham promised to prioritize these measures, telling ministers he wanted to give people a "sense that help is coming."
The new cap will apply to non-discounted single journeys on participating buses outside of London, where the standard fare is currently £1.75. The government expects the move to particularly benefit passengers in rural and coastal regions, where single fares are often higher. However, the Campaign for Better Transport highlighted that rural areas continue to suffer from reduced services, noting that such areas have been more affected by council cutbacks in the last decade than urban zones.
According to the County Councils Network, which represents 39 unitary and county councils across England, services in those areas—as measured by vehicle miles—decreased by 18% between 2019 and 2024. Michael Solomon Williams of the Campaign for Better Transport urged the government to focus on replacing these lost services.
Funding for the scheme will be supported by a £454m reallocation from the Department for Energy Security and Net Zero (DESN). Alexander explained that this will be used in addition to funds already earmarked by the Department for Transport. She noted that the money had been allocated in the DESN budget for international climate projects, but instead of issuing them as grants, the government will now issue them as loans so the capital can be recovered.
Shadow Chancellor Mel Stride criticized the announcement, questioning the lack of transparency regarding the long-term funding source and expressing concern over the government's approach to public finances, stating that the government is making spending commitments without explaining where the money will come from.
The policy will be supported by equivalent funding for Scotland and Wales. The Scottish government, which previously piloted a £2 bus fare cap across the Highlands and Islands for a year, is looking at bringing forward legislation for a £2 cap across the whole of Scotland by the end of this parliament. In Wales, single fares are already limited to £1 for those under 21. Northern Ireland will also receive a small amount of additional money, though ministers there will not be obliged to spend it on public transport, with the exact amount to be confirmed in the autumn budget.
When the £2 cap was first introduced in 2023, it served both as a cost-of-living relief measure and a strategy to encourage public transport use following the pandemic. Data from the Office for National Statistics indicated the scheme played a role in reducing inflation that year. An evaluation of the first ten months found that the scheme contributed 5% of the 13% rise in bus usage during that period, with lower-income passengers feeling the most financial benefit. In those first ten months, £210m was spent on the scheme, which was less than the £245m budget.
Despite these efforts, ridership levels are still recovering from the drop during Covid; by March 2025, 1.9 billion journeys were made on local buses in England outside of London, which is around 93% of pre-pandemic levels. This announcement marks the second day in a row that the new Prime Minister has announced cost-saving measures, following Tuesday's VAT cut on household electricity bills.
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