The new prime minister, Andy Burnham, has announced that single bus fares in England will be capped at £2 from January 2027. The measure, expected to cost over £500 million, will apply to participating buses outside of London and aims to provide more affordable travel for millions of passengers, particularly in rural and coastal areas.
This policy reverses a previous increase to £3 under the former Labour government led by Sir Keir Starmer, and mirrors similar initiatives in Greater Manchester and Liverpool where fares have been held at £2. The scheme is intended to ease the cost of living while maintaining access to essential transport for work, education, and healthcare, according to statements from the Prime Minister’s Office.
Background and Funding of the Fare Cap
The £2 cap was first introduced in January 2023 under the Conservative government, initially intended to last three months before being extended. As Mayor of Greater Manchester, Andy Burnham implemented a £2 cap in September 2022, funded with central government support. In January 2025, fares across England rose to £3, although some city regions retained the lower £2 rate, according to reports from The Guardian.
According to the Prime Minister’s Office, the national rollout of the £2 cap will be funded through a combination of savings and reprioritisation of existing budgets. Around £454 million will come from switching money allocated to international climate finance into loans, alongside £50 million already earmarked by the Department for Transport for bus services. Transport Secretary Heidi Alexander told BBC Breakfast that the funding for the scheme is secured and represents a reprioritisation rather than additional expenditure.
The Office for National Statistics highlighted that previous bus fare caps contributed to increased ridership, with a reported 5 per cent of the 13 per cent rise in bus usage in 2023 attributed to the scheme. Lower-income passengers were identified as the primary beneficiaries, although evaluations noted that value for money varied depending on pre-existing local fares.
Implications for Passengers and Local Communities
According to statements from Prime Minister Andy Burnham, the policy is intended to prevent people being priced out of essential transport. The cap is expected to lower costs for everyday journeys, including travel to work, education, healthcare, and leisure activities. John Healey, Chancellor of the Exchequer, said the measure will save millions of passengers roughly a third of the cost of single bus journeys and is funded through budget reallocations to avoid placing a burden on taxpayers.
The fare cap is anticipated to particularly assist residents in rural and coastal areas where fares are often higher, according to reporting from the Guardian. Local leaders will also have the opportunity to manage bus services through franchising schemes, building on the model of Greater Manchester’s Bee Network, where fares have remained at £2 for several years. Transport Secretary Heidi Alexander added that the policy signals the government’s direction in making public transport more accessible while giving local authorities greater planning certainty.
The scheme aligns with broader measures aimed at alleviating the cost of living, including a freeze on rail fares earlier this year, which is projected to save commuters significant amounts. The Trades Union Congress welcomed the initiative, noting its potential to support households and local economies, while critics raised concerns about funding transparency and fiscal sustainability, according to The Guardian.
Passengers can expect the cap to take effect from 1 January 2027, with most single fares outside London currently held at £3 until that date. The government intends for the cap to remain in place throughout 2027, providing certainty for travellers and local authorities alike.
