Single bus fares across most of England will be capped at £2 from 1 January 2027 under new plans announced by Prime Minister Andy Burnham, with the measure set to remain in place until the end of the year.
The government said the policy is intended to help ease the cost of living by reducing the price of everyday journeys, with many passengers expected to see fares fall by around a third.
The national bus fare cap was first introduced by the previous Conservative government in January 2023 at £2. It increased to £3 following the 2024 general election and is currently due to remain at that level until the end of March 2027. Some areas, including Greater Manchester and London, already operate different fare structures and will not be affected by the new national cap in the same way.
The government said the scheme will cost just over £500 million. Around £454 million will be provided through money reallocated from the Department for Energy Security and Net Zero, while approximately £50 million will come from existing Department for Transport funding that had already been allocated to bus services. Ministers said the changes would involve switching some international climate funding from grants to loans.
Announcing the policy, Mr Burnham said:
“Good, affordable transport links are an essential. No one should be priced out of those and left behind.
“But for too long people have said that cheaper transport isn’t an option. I don’t accept that. I’ve done it before and I will do it again now: a £2 cap on bus fares for millions across the country.
“Lower fares will help people get to where they need to, giving them breathing space to help with the cost of living.”
Chancellor John Healey said millions of passengers would benefit from lower fares, adding that the measure had been funded through savings elsewhere in government rather than additional borrowing.
Transport Secretary Heidi Alexander said the policy would make everyday journeys “easier and cheaper” and confirmed that the majority of the funding would come from changes to the government’s international climate finance programme.
The announcement is the second major cost-of-living measure unveiled by Mr Burnham since becoming Prime Minister, following plans announced earlier this week to remove VAT from domestic electricity bills.
