England to Reintroduce £2 Bus Fare Cap Starting January

New Delhi, India Jul 22, 2026 ALN: The bus fare cap in England will revert to £2 from January, new Prime Minister Andy Burnham has announced.

The government says the policy, which is expected to cost more than £500 million, will "help with the cost of living and give people the breathing space they need". The reintroduction of the fare cap comes at a time when many households are struggling with rising living costs, particularly in the wake of inflationary pressures exacerbated by global events. The decision aims to alleviate some of the financial burdens faced by the public, especially those who rely on public transport for daily commutes and essential travel.

At the start of last year, the England-wide bus fare cap rose to £3 under Sir Keir Starmer's Labour government, although in Liverpool and Manchester fares were held at £2. The increase to £3 was met with criticism from various sectors, including commuters and transport advocates, who argued that such a rise would further strain the budgets of low-income individuals and families. Burnham stated that affordable transport links are essential, adding: "Lower fares will help people get to where they need to." This sentiment reflects a growing recognition of the role public transport plays in supporting economic mobility and access to services.

The measure gives people "a little bit of hope" in a time when many are grappling with higher living costs, especially after fuel costs spiked due to the US-Iran war, transport secretary Heidi Alexander told the BBC's Today programme. The geopolitical tensions in the Middle East have had far-reaching implications for global oil prices, which in turn affect transportation costs. However, she admitted that the measure was "not the whole solution," indicating that while the fare cap is a step in the right direction, it must be part of a broader strategy to address the cost of living crisis.

The new cap will take effect from January next year for fares on participating buses outside of London. The cost of a non-discounted single bus journey in London is £1.75, showcasing a notable difference in fare structures between urban and rural areas. The Burnham government indicated that reverting to a £2 cap should particularly benefit passengers in rural and coastal areas, where single fares can be higher. This is significant because rural communities often face challenges related to public transport accessibility, which can impact residents' ability to access employment, education, and healthcare services.

The Campaign for Better Transport noted that rural areas are still suffering from fewer bus routes and services, adding that such areas have been more affected by council cutbacks in the last decade compared to urban zones. This reduction in service has compounded the difficulties faced by residents in these regions. Services in those areas, as measured by vehicle miles, decreased by 18% between 2019 and 2024, according to the County Councils Network, which represents 39 unitary and county councils across England. The decline in bus services has raised concerns about social isolation and economic disadvantage in rural communities.

"What we need to see is the replacement of those lost services which have particularly affected those in rural areas," stated Campaign for Better Transport's Michael Solomon Williams. This highlights the need for comprehensive transport planning that addresses both the affordability and availability of services. Without adequate public transport, rural areas risk being left behind in terms of economic development and social cohesion.

What about N Ireland, Scotland and Wales?

In other nations, public services in Northern Ireland will also receive a small amount of additional funding, though ministers will not be obliged to spend the money on public transport. The exact amount will not be known until the autumn budget. This uncertainty raises questions about the commitment to improving public transport across the UK, particularly in regions that have historically received less investment. Scotland and Wales will receive equivalent funding to England for the bus fare cap scheme, which is intended to create a more uniform approach to public transport affordability across the nations.

The Scottish government, which piloted a £2 bus fare cap across the Highlands and Islands for a year, mentioned it is looking at introducing legislation for a £2 bus fare cap across the whole of Scotland by the end of this parliament. This initiative reflects a proactive approach to addressing transport costs in Scotland and could serve as a model for other regions. Single fares are already limited to £1 for under 21s in Wales, showcasing a commitment to making public transport more accessible for younger populations.

Bus Use Still Lower Post-Covid

When first introduced in 2023, the £2 cap was intended both as a cost of living measure and to encourage people back onto buses following the pandemic. The COVID-19 pandemic caused significant disruptions to public transport, leading to a substantial decline in ridership as people shifted to remote work and other alternatives. It played a role in reducing inflation that year, according to the Office for National Statistics. The fare cap scheme was designed to stimulate demand and support the recovery of the transport sector.

An evaluation of the first ten months found that the scheme contributed to a 5% increase in bus usage during that period. Lower-income passengers felt the most financial benefit, highlighting the importance of targeted measures to support vulnerable populations. However, it did not score highly in terms of value for money. The savings people experienced varied depending on local fare costs prior to the cap, which raises questions about the uniformity and effectiveness of such policies across different regions.

In those first ten months, £210 million was spent on the scheme, which was less than the £245 million budget. This underspending indicates that while the initiative was beneficial, it may not have fully met its potential. Even if fare-capping measures had increased demand for bus travel, numbers are still recovering from the significant drop in usage during Covid. By March 2025, 1.9 billion journeys were made on local buses in England outside of London, approximately 93% of pre-pandemic levels. This recovery is a positive sign, but it also underscores the challenges that remain in restoring public confidence in public transport.

Shadow Chancellor Mel Stride expressed concern that the government has not specified where the funding for the bus fare cap extension will come from. "That is a worrying sign; we need a government that is on top of public finances, not one making spending commitments without explaining the source of the funds," Stride told BBC Breakfast. This scrutiny reflects broader concerns about fiscal responsibility and the sustainability of public spending in light of ongoing economic challenges.

In its announcement, the government stated that £454 million will be reallocated from the Department for Energy Security and Net Zero (DESN). DESN indicated this will be in addition to funds already earmarked by the Department for Transport for buses. This reallocation raises questions about priorities in government spending, particularly in relation to climate initiatives versus public transport funding. Alexander explained that this money had been allocated in DESN's budget for international climate projects. "Instead of distributing that money as grants, we will be issuing loans, allowing the funds to be recouped," she said. This approach suggests a shift in how government funds are utilized, potentially impacting other areas of policy.

This is the second consecutive day that the new Prime Minister has announced cost-saving measures, following Tuesday's VAT cut on household electricity bills later this year. These announcements indicate a concerted effort by the Burnham government to address the cost of living crisis through various fiscal policies. In his first cabinet meeting on Tuesday, Burnham promised to lead a "cost of living government," telling ministers that he wanted to provide people with a "sense that help is coming" regarding costs. This commitment to addressing economic challenges will likely be a central theme of Burnham's administration as it navigates the complexities of post-pandemic recovery and ongoing economic pressures.