England’s bus fare cap will fall back to £2 from January, with the new prime minister Andy Burnham unveiling the change as part of a wider effort to reduce household costs. The government says the policy is expected to cost more than £500m and is intended to give people “breathing space” as transport and living expenses remain under pressure.
The £2 limit is not new. It was first introduced by the previous Conservative government in January 2023, initially for three months before being extended. Burnham had already imposed a £2 cap in Greater Manchester in September 2022, using central government funding at the time. The England-wide cap later increased to £3 in January 2025 under Sir Keir Starmer’s Labour government, although some city regions, including Liverpool and Manchester, kept fares at £2.
Funding and impact
According to the report, the original scheme applied to participating bus operators outside London and was designed both to help with the cost of living and to bring more passengers back after the pandemic. An assessment of the first ten months, published later, found the cap contributed 5% of a 13% rise in bus use during that period. Lower-income passengers were said to benefit most financially, though the scheme was not judged especially strong on value for money. Spending reached £210m in those first ten months, below the £245m budget.
The new £2 cap will take effect on 1 January 2027 and will apply to participating buses outside London. The government says £454m will be shifted from the Department for Energy Security and Net Zero to help fund the change, alongside money already set aside by the Department for Transport for buses. Shadow Chancellor Mel Stride questioned where the money would come from, saying the government had not clearly explained how the policy would be paid for.
Burnham said affordable transport links were essential and argued that lower fares would help people get where they need to go. The announcement follows other recent cost-saving measures from his government, and he has said he wants to lead a “cost of living government” that gives people a sense that help is coming.
Source: bbc.co.uk
