England to Reinstate £2 Bus Fare Cap From January 2027

Bus passengers across England will once again benefit from a £2 cap on single fares from January 2027, Prime Minister Andy Burnham has announced as part of a wider effort to ease the cost of living.

The government said the scheme, expected to cost more than £500 million, is designed to make public transport more affordable while providing financial relief for commuters.

The nationwide bus fare cap was first introduced by the previous Conservative government in January 2023, initially as a temporary three-month measure before being extended. In January 2025, the Labour administration under former Prime Minister Sir Keir Starmer increased the cap to £3, although regions such as Greater Manchester and Liverpool continued to maintain £2 fares through local arrangements.

Burnham, who introduced a £2 fare cap in Greater Manchester while serving as mayor in 2022, said affordable transport is essential to ensuring people are not excluded from work, education or other opportunities.

He said lower fares would help ease household expenses and improve access to essential services.

The original fare cap applied to participating bus operators outside London on a voluntary basis. It was introduced both to support households during the cost-of-living crisis and to encourage more people to return to public transport after the COVID-19 pandemic.

According to the Office for National Statistics, the scheme contributed to lower inflation in 2023 and was widely welcomed by passengers.

A government evaluation published in 2025 found the initiative accounted for around five percentage points of a 13 per cent increase in bus patronage during its first 10 months. Lower-income travellers were found to have benefited the most financially.

However, the review also concluded that the programme offered mixed value for money, noting that savings varied depending on local fare structures before the cap was introduced.

During its first 10 months, £210 million was spent on the scheme, below its allocated budget of £245 million. The subsequent £3 fare cap for 2025 was supported by £150 million in government funding.

The government said restoring the £2 limit would particularly benefit passengers in rural and coastal communities, where bus fares tend to be higher.

The revised fare cap will take effect on 1 January 2027 for participating bus services outside London.

Shadow Chancellor Mel Stride questioned how the government intends to fund the policy, arguing that ministers had yet to fully explain where the money would come from.

In response, the government said £454 million would be redirected from the Department for Energy Security and Net Zero, alongside transport funding already allocated for bus services.

The announcement follows another cost-of-living measure unveiled by Burnham’s administration, including plans to reduce VAT on household electricity bills later this year.

Speaking during his first Cabinet meeting, Burnham said his government would prioritise easing financial pressures on households and pledged to lead what he described as a “cost of living government.”