When you hop on a bus in England outside London, a single journey will soon cost you no more than a £2 coin. In July 2026, new Prime Minister Andy Burnham announced that the nationwide bus fare cap would revert to £2 from January 2027, reversing an increase to £3 that his predecessor Keir Starmer had put in place. The measure is expected to cost more than £500 million, drawing funding from reprioritised international climate finance and savings in energy budgets — a clear signal that affordable transport is a cornerstone of the new government's cost-of-living agenda.
The bus fare cap is a government subsidy that limits the price of a single bus journey on participating services. It applies to buses in England, but not London (where Transport for London sets its own fares) and not in Scotland, Wales or Northern Ireland, though the government says it has allocated money to allow devolved administrations to take similar action. The cap was first introduced by the Conservative government in January 2023 at £2, initially intended to last just three months as both a cost-of-living measure and an incentive to encourage people back on buses after the pandemic. It proved so popular that it was extended, and an evaluation of its first ten months found it contributed 5% of the 13% rise in bus usage during that period, with lower-income passengers benefiting most financially. However, the same evaluation — not published until 2025 — noted the scheme did not score highly on value for money, and the amount passengers saved varied depending on local fares before the cap.
“Explains the £2 bus fare cap in England, how it works, its history, and impact on passengers.”
In January 2025, Sir Keir Starmer’s Labour government raised the cap to £3, arguing the £2 level was not affordable. Yet some metro mayors, including Burnham in Greater Manchester and the mayor of Liverpool, kept a £2 cap in their regions using local funding. Now, as prime minister, Burnham has restored the lower cap nationwide, saying “no one should be priced out” of affordable transport. The government insists the £454 million of reprioritised spending is fully funded — switching some international climate grants to loans and reallocating money from the Department for Energy Security and Net Zero — but opposition figures like Shadow Chancellor Mel Stride have criticised the lack of detail on where the money will come from.
For UK readers, the return of the £2 bus fare cap has direct, practical consequences. If you live in a rural or coastal area where single fares can be especially high, you could save a third or more per journey compared to the £3 cap. The measure is part of a wider cost-of-living push by Burnham’s government, which has also pledged to cut VAT on domestic electricity bills. With inflation at 2.6% in June 2026, the bus cap offers some relief at a time when household budgets remain squeezed. Yet the policy is not without trade-offs: the £500 million-plus bill raises questions about long-term affordability and what other projects may be scaled back to fund it.
Q: How does the bus fare cap work? Bus operators in England (outside London) take part voluntarily. The government reimburses them for the difference between the capped fare and the usual ticket price. Passengers simply buy a single ticket for no more than £2. The cap applies to single journeys only, not day or weekly passes.
Q: Is the £2 bus fare cap permanent? No. The new cap is set to be in place throughout 2027, but like its predecessor, it could be extended or changed depending on government priorities and budget pressures. The previous cap started as a temporary three-month measure and was extended multiple times.
Q: Who benefits most from the £2 bus fare cap? Lower-income passengers and those in rural and coastal areas where bus fares tend to be higher. The ONS reported the earlier cap helped reduce inflation in 2023. During the first ten months, £210 million was spent on the scheme — under budget — and bus usage rose by 13%, with the cap contributing 5% of that increase.
