A look back at the £2 fare cap

As we all know the £2 fare cap ended at the end of 2024 but was it all worthwhile?

The £2 Bus Fare Cap (BFC) was introduced by the UK Department for Transport (DfT) on 1 January 2023 to make bus travel more affordable and encourage public transport use. Initially set to run until March 2023, the scheme has been extended multiple times and is now scheduled to continue until 31 December 2024. The fare cap applies across England (excluding London), with voluntary participation from bus operators, capping single fares at £2.

This blog explores the findings from an independent evaluation of the first 10 months of the scheme (January–October 2023), covering its impact on bus patronage, affordability, and operator participation, with a regional breakdown where available.

---

Objectives of the £2 Bus Fare Cap

The scheme had two primary aims:

1. Reducing the Cost of Living – By making bus travel cheaper, particularly benefiting low-income households.
2. Boosting Bus Patronage – Encouraging people to use buses more frequently and shift from other modes of transport.

Additionally, it aligned with the National Bus Strategy (NBS) to promote modal shift, helping reduce congestion, improve air quality, and lower carbon emissions.

---

Key Findings from the First 10 Months

📈 Impact on Bus Patronage

• Bus usage increased by around 5% due to the £2BFC, contributing to an overall 13% increase in patronage outside London between January and October 2023.
• The total increase reflects a mix of post-pandemic recovery, local transport investments, and the fare cap itself.
• 16–24-year-olds, urban residents, and frequent bus users benefited the most, reporting more trips due to the fare cap.
• The scheme had a greater impact on leisure travel than on commuting for work or education.

Regional Breakdown of Bus Usage Changes

• North of England: The highest impact was observed in urban areas such as Manchester, Leeds, and Newcastle, where bus ridership saw strong recovery post-COVID. However, these areas had existing fare caps in place (Greater Manchester and West Yorkshire), limiting additional effects.
• Midlands: Cities like Birmingham, Leicester, and Nottingham saw steady increases in bus travel, particularly among younger passengers and those making social trips.
• South & East of England: More modest increases in areas with strong rail networks or where car dependency remains high. However, long-distance rural routes benefited significantly.
• South West & Coastal Areas: Some rural communities saw substantial savings, leading to increased use, especially for those making infrequent but costly trips.

---

💰 Impact on Cost of Living

• The scheme lowered the cost of single bus fares by 27%, particularly for passengers who previously paid more than £2 per trip.
• Savings varied significantly by region, as bus fares differ widely across England. For example:
  • In London and Greater Manchester, where fares were already capped, there was little impact.
  • In rural areas with high single-ticket prices (e.g., £4.50 for a 3-mile journey), the savings were substantial.
• A survey found 67%–73% of users saved money on travel, allowing them to spend more on essentials like food and leisure activities.
• Low-income passengers were most positively affected, particularly in urban areas where public transport is essential.

---

🚗 Modal Shift: More Buses, Fewer Cars?

• 39%–48% of people who took additional bus trips said they would have used another mode of transport without the fare cap.
• The main shift was from cars to buses, reducing congestion and emissions.
• Rural and suburban areas saw new bus users who previously relied on cars due to high fares.

---

🎟️ Changes in Ticket Buying Behaviour

• A significant increase in single ticket sales (+85%) was observed, suggesting passengers switched from period tickets (weekly/monthly) to cheaper £2 singles.
• Ticket substitution effects:
  • Sales of return tickets fell by 34%.
  • Daily and weekly tickets saw declines of 28% and 7% respectively.
  • Monthly ticket sales increased by 7%, indicating that some regular users stuck to their usual habits.
• Some passengers preferred single tickets for flexibility, rather than paying upfront for period passes.

---

🚌 Operator Participation and Challenges

• Voluntary participation remained high, covering around 90% of the bus market.
• Some operators withdrew, citing financial challenges and administrative burdens.
• Capacity issues emerged on busy routes due to increased demand.
• Data reporting requirements were a challenge, especially for smaller operators.

---

⚖️ Was the Scheme Good Value for Money?

• The Benefit-Cost Ratio (BCR) was estimated at 0.71–0.9, meaning it did not meet the threshold for high value for money.
• However, the BCR might be above 1 (low VfM) when considering unquantified benefits, such as:
  • Wellbeing improvements from increased mobility.
  • Economic gains from increased retail and leisure trips.
  • Environmental benefits from fewer car journeys.
• Budget: £210m spent (14% lower than planned), suggesting costs were well-managed.

---

🔍 Lessons Learned & Future Considerations

✅ What Worked Well?

✔️ Increased bus ridership, particularly for leisure and social trips.
✔️ Reduced costs for low-income passengers and rural communities.
✔️ Encouraged some modal shift from cars to buses.
✔️ Helped stabilize post-pandemic bus patronage recovery.

❌ Challenges & Areas for Improvement

⚠️ Ticket substitution effects reduced revenue from period tickets, affecting operators.
⚠️ Administrative burden on operators, especially small ones.
⚠️ Capacity constraints on popular routes, leading to overcrowding.
⚠️ Ending the scheme could lead to fare shock, requiring a phased approach.

Conclusion

The £2 Bus Fare Cap has had a positive impact, making travel cheaper and more accessible, particularly for young people, urban commuters, and low-income households. It increased bus ridership by about 5% and saved money for passengers, though it faced challenges with operator reimbursements and ticketing behavior shifts.

While the scheme achieved its strategic goals, it was classified as "low value for money", meaning its long-term sustainability remains uncertain. Future policy decisions must consider how to transition away from the scheme without disrupting bus usage or causing financial difficulties for passengers and operators alike.

The South West

The South West region, including Devon, Cornwall, and Plymouth, saw a notable increase in bus usage following the introduction of the £2 fare cap. The evaluation highlights that the South West had the second-highest increase in bus patronage among all English regions, alongside a significant reduction in single ticket prices​.

📌 Key Findings for the South West

• Bus patronage increased significantly across the region, ranking second in overall growth in England.
• Savings on single tickets were among the highest, indicating that passengers in the region benefited substantially from the fare cap.
• Cornwall was highlighted as a special case, as it already had a local fare cap before the national scheme. Discussions between local authorities and the Department for Transport (DfT) were necessary to avoid double funding and manage reimbursement complexities​.
• Devon and rural areas benefited from cost reductions on long-distance trips, making bus travel more viable for those who previously relied on cars due to high single-ticket prices.
• Plymouth saw increased bus ridership, though the impact was moderated by existing fare structures and urban connectivity.

The full document can be read here 

[I might have had bit of help from ChatGTP here!]

From my own personal perspective the £2 fare cap was useful and seemed to be very popular. I am not a high user of buses as I am only in the office 2 days a week. The new fare for my regular journey is £2.50 so not too bad, but I managed to buy five sets of the 5 day rider tickets so its now only costing me £4.80 a day ticket – which by careful timing around the 24 hours per ticket gives me three out of my four journeys a week. Should last me through to the Summer hopefully!

Was it worth it though? or perhaps more importantly, could the £210 million have been better spent? How many passengers will drop off now the fares have gone back up again? Personally I feel it would have been better aimed at rural areas where the fares are much higher and the buses a lot less frequent.