Rachel Reeves confirms £3 bus fare cap will be extended until 2027 | Personal Finance | Finance

Chancellor Rachel Reeves has confirmed the £3 bus fare cap will be extended to 2027 during today’s Spending Review. Labour increased the price cap on single bus fares from £2 to £3 on January 1, 2025, and it was due to remain in place until December 31, 2025. However, the Chancellor has announced that the cap will now remain in place until at least March 2027.

The cap means no single bus fare on routes included in the scheme will exceed £3, and routes where fares are less than £3 will only be allowed to increase by inflation in the normal way. This means that some fares will remain below £3. Without the cap, the Government previously said fares could rise by as much as £12 for a journey between Leeds and Scarborough, or £5.50 for a ticket between Hull and York.

Some have criticised the £3 cap, arguing it’s still too high. Paul Kohler MP, Liberal Democrat transport spokesman, said: “Household budgets are still really feeling the squeeze, so many will be really disappointed to see that the Government is moving to make the bus fare hike permanent.

“This will hit those who rely on public transport to get around to their local high street or to work and school in the pocket. People have been telling them they got this wrong, but Labour clearly isn’t listening.”

He urged the Government to reduce the cap back to “its previous level”.

Labour previously explained that the increase earlier this year came as funding for the lower £2 cap, which was introduced by the former Tory Government, “expired” in December 2024.

Bus routes included in the £3 price cap span all regions in England. However, participation is voluntary, and some bus companies have chosen not to participate.

Fares are capped locally in London, so they are not included in this scheme. The full list of bus routes included in the cap can be found here.

Rachel Reeves announced the Spending Review to the House of Commons on Wednesday, June 11, setting out how she plans to spend £600billion of taxpayers’ money over the next few years.