Andy Burnham, the new Prime Minister, has announced a significant shift in policy, capping most bus fares in England at £2 from January 2027. This move marks a stark contrast to the approach of his predecessor, Keir Starmer, who initially emphasized the challenges of implementing cost-effective measures. Burnham's strategy, which includes a tax cut on household electricity bills, is designed to provide 'breathing space' for citizens grappling with the escalating cost of living.
The decision to cap bus fares at £2 is a continuation of Burnham's commitment to affordable public transportation, a policy he successfully implemented during his tenure as Manchester mayor. The 'Bee Network' initiative, launched in 2023, aimed to provide a London-style integrated bus and tram service under local control, with single fares capped at £2. This initiative was initially funded by central government and aimed to boost bus usage, particularly among lower-income passengers.
However, the effectiveness of the £2 cap in Manchester has been questioned. The ONS evaluation found that while it contributed to a 5% increase in bus usage, it did not score highly for value for money. The cap's impact varied depending on the pre-cap fare levels in different areas, with rural and coastal regions benefiting more.
The funding for the bus fare cap extension has sparked controversy. Shadow Chancellor Mel Stride criticized the government for not specifying the source of the funds, raising concerns about the public finances. The government, however, claims that the £454 million will be reallocated from the Department for Energy Security and Net Zero, in addition to funds from the Department for Transport.
Burnham's focus on affordable transport is a significant departure from the previous government's approach. The cap on bus fares is seen as a crucial step in ensuring that no one is 'priced out' or 'left behind' in terms of access to essential transportation. This policy aligns with Burnham's broader agenda, which includes ambitious council housebuilding, social care reforms, and public control of utilities.
The timing of this announcement is particularly noteworthy. Coming on the heels of the pledge to cut VAT on household electricity bills, it underscores Burnham's commitment to delivering tangible measures that can be implemented quickly. As the new Prime Minister navigates the complexities of public finances and policy implementation, his ability to balance these commitments will be a key indicator of his leadership and the success of his administration.
