BBC- Andy Burnham announced that the £2 bus fare cap in England will be funded by re-prioritising money from international climate finance.
- The government states that the cost of the cap is over £500m, with £454m being reallocated from the Department for Energy Security and Net Zero.
- Chancellor John Healey claims the cap will cut fares by a third for millions of people, and that all bus fares will be capped at £2 throughout 2027.
- The Liberal Democrats welcome the cap but call it 'an easy win', while Shadow Chancellor Mel Stride questions where the funding is coming from.
- Alex Chapman of the New Economics Foundation states that the money spent on the policy is 'very small in government terms' and the cap is limited in scale.
Andy Burnham has confirmed that the £2 cap on single bus fares in England will be implemented starting January 1, 2027, with funding sourced from a reallocation of £454 million from the Department for Energy Security and Net Zero.1
This initiative, projected to cost over £500 million, aims to reduce bus fares by a third for millions of passengers. Chancellor John Healey emphasized the significance of this cap, stating it will provide substantial relief to commuters.34
The funding strategy has drawn mixed reactions, with Shadow Chancellor Mel Stride questioning the clarity of the funding sources, while Burnham insists that the government is not making any unfunded commitments.256
The cap was initially introduced by the Conservative government in January 2023 and applies to single fares outside London.
According to statistics, passengers made just under 1.9 billion local bus journeys in England outside London in the year to March 2025, a notable increase from 1.6 billion in the previous year.
Alex Chapman from the New Economics Foundation expressed satisfaction with the swift implementation of the fare cap but noted that the financial commitment is relatively small in the broader context of government spending.7
The Liberal Democrats welcomed the return of the £2 cap, labeling it an easy win for Burnham, while others remain skeptical about the funding's sustainability.
“The £2 cap is expected to cost over £500m, with £454m reallocated from the Department for Energy Security and Net Zero by switching international climate finance to loans. Chancellor John Healey says the cap will cut fares by a third for millions of people and remain in place throughout 2027.”
