Bus fares across the country will rise in the new year as part of a ‘managed exit’ from the £2 fare cap.

Prime minister Keir Starmer confirmed on Monday that the maximum fare for a single bus journey in England outside London will rise to £3 on 1 January, when the current £2 cap expires.

The Government said the new £3 fare will keep bus travel affordable while ensuring the cap is fair to taxpayers, helping millions of people access better opportunities, and protect vital bus routes, particularly lifeline services in rural communities.

The Department of Transport (DfT) pointed out that local authorities and metro mayors can also fund their own schemes to keep fares down, ‘as is already the case in London, West Yorkshire and Manchester’.

It said the one-year extension to the cap will cost £151m and linked it to £925m planned spending for 2025-26 to improve bus services across the country, ‘bringing total bus investment at the Budget to over £1bn’. The DfT added that the Government will also explore 'more targeted options that deliver value for money to the taxpayer'.

Transport secretary Louise Haigh said the move ‘will avoid a cliff edge at the end of this year and keep fares affordable across the country’.

She said: ‘We know that reliable, affordable bus services are vital to keeping Britain moving.

‘That’s why the Government will cap fares at £3 for an additional year and provide over £1bn to deliver better bus services.’

As part of the DfT announcement, David Sidebottom, director at ‘independent’ watchdog Transport Focus, said: ‘We welcome the wider investment in services, and the announcement of a new £3 cap on bus fares will provide certainty for many people who are struggling and worried about the cost of travel.’

In a statement, the Confederation of Passenger Transport (CPT) said: ‘We are pleased that the government has taken steps to implement a managed exit from the £2 fare cap in line with our proposals.

‘While it will avoid the dangers of a cliff edge at the end of this year, an increase to £3 will still present challenges for many passengers, particularly those who rely on buses as their primary means of affordable travel.’

The CPT said that as the new cap takes effect, the industry will work closely with government and local authority partners ‘to ensure passengers understand how fares will change and are informed about the range of ticketing options available to help manage travel costs’.

Cllr Peter Thornton, transport spokesperson for the County Councils Network, said: ‘Whilst we are disappointed that the bus fare cap will rise to £3, extending the cap for another year is a positive step and it will make a difference for many rural residents for whom buses are a lifeline service.’

This article was originally published by Transport Network.