Fare caps are an easy way to grab attention, but what happens after they end and could funding be better invested elsewhere?
England’s £2 bus fare cap morphed into a three-year experiment – into which the government will have ploughed £630m by the time it expires at the end of this year
If there’s one thing politicians love when it comes to talking about buses, it’s a flat fare. They gaze longingly at the likes of London and Edinburgh and sigh, “It could all be so simple.”
And I suppose it doesn’t hurt that a round-pound figure looks nice on a leaflet and sounds good on the campaign trail.
It’s precisely because it struck Downing Street and Great Minster House as a quick win that the English fare cap was born amid the cost-of-living crisis. Former prime minister Boris Johnson saw merit in making bus travel less of a financial burden at a time when fuel prices and energy bills were surging and just about everything else was squeezed by inflation. The government also hoped that cheaper pay-as-you-go travel would entice more people on-board as part of the ever-elusive mission to unlock modal shift. Public approval was quickly expressed, and a three-month trial morphed into a three-year experiment in fares management on a national scale – into which the government will have ploughed £630m by the time it expires at the end of this year.
The proof is in the proverbial pudding: almost 150 operators (representing 90% of the market) signed up, 7-in-10 adults were aware, and patronage grew. The last point (which is arguably the whole point) is where the cap’s efficacy isn’t quite cut-and-dry: its introduction coincided with the economy recovering from Covid, which doubtless means many of those journeys would have come back anyway, cap or no cap. That’s where regional analysis comes in. Growth in London (which wasn’t in the scheme as bus fares are already set below £2 by Transport for London) was 4% in 2023/24. In metro areas outside London, the increase was 7.6% – almost twice as high. And in non-metropolitan counties, where passengers enjoyed the greatest cash savings, the surge was over 10%.
Caveats such as socio-economic differences between London and the rest of England aside, a rough-and-ready analysis could assume that 4% was the neutral, natural ‘do-nothing’ effect – and anything above that was genuine growth which can be credited to the cap. After all, it wasn’t stimulated by higher frequencies or greater network coverage, as national mileage grew by less than 1% in the same period (there’s a whole other piece to be written on the matter of operators expecting passengers to make do with “temporarily” shrunken networks three years after a post-pandemic driver shortage).
A win is a win, yes. But it’s hardly an all-round, all-out victory
However, the government’s own evaluation found that most of those new trips were generated by existing bus users travelling more often, not by a Damascene conversion among motorists. Plus, patronage is still lingering short of pre-Covid levels. A win is a win, yes. But it’s hardly an all-round, all-out victory. The same decision-makers who are too afraid to lift a regressive 15-year freeze on fuel duty must reckon with the reality that sticks (such as London’s congestion charge or Edinburgh’s parking levies) are more effective than carrots (like the cap) in dragging motorists out from behind the wheel.
This is where letting politicians call the shots on something as fundamental as price points carries massive risk: no matter what they say, their horizon is always the next election. And, once even they start to sense they’ve overstayed their welcome, they aren’t averse to saddling their successors with a bind in exchange for a boost. Case in point: the Tories earned some plaudits by making fares cheaper, whilst leaving Labour to inevitably make them more expensive again. Giving things away is much more fun than taking them away. Never mind that £3 is still significantly cheaper than many journeys were in the pre-cap era. Public memory doesn’t work that way. That’s ancient history now. “Get around for £2” might as well have been engraved on Stonehenge at this point.
Let’s circle back to fuel duty: Governments of all stripes are clearly capable of everlasting giveaways they allegedly can’t afford when it suits them. So why are bus passengers in for a rough ride once again whilst motorists drive along easy street? The government might have gotten away with arguing that cheaper bus fares were never going to last forever if only fuel duty hadn’t now been frozen for more than half of my lifetime. If I were to raise this at one of those hypothetical historical dinner parties, I suppose Harold Macmillan would shrug and tell me, “Priorities, dear boy, priorities.”
The challenge for the government now is to map out what happens beyond December 31 2025: is there an off-ramp or is it a cliff-edge? At the moment, the ferocity with which this particular sticking plaster gets ripped off isn’t clear. In the lead-up to the budget, Louise Haigh, the former transport secretary, said the cap would expire but “targeted measures” aimed at young people and rural communities would take its place. She didn’t set out what form these measures would take, but did acknowledge that reliability is a bigger barrier to non-users than cost. Indeed, a survey by Transport Focus in 2023 found that only 1-in-10 non-users said the cap would encourage them to start using the bus.
This calls into question whether £630m was indeed better spent on a short-term gimmick than longer-term investments in priority infrastructure. Making buses quicker and more reliable cuts costs and boosts revenue. Perhaps the route to a commercially viable cap (one that could have been introduced and sustained without subsidies) might have been the state negotiating fare reductions in exchange for time savings. Oh, to live in an ideal world.
Given the English scheme’s mixed success and the political headaches of trying to unpick it, it is perhaps surprising that the Scottish Government granted Green Party wishes for a year-long pilot of a £2 limit in an as-yet-unnamed region. England is already moving upwards from that level and, not so long ago, the Scottish Government had their own fingers burned by reinstating peak rail fares after a pilot to scrap them; they weren’t simply blamed for letting temporary discounts lapse, they were accused of hiking costs for hard-working commuters. Whilst Boris Johnson boldly championed his fares cap, the Scottish Government swithered about affordability – but now appears to have accepted it’s the price of passing a budget. And yet, to see the fate it’s tempting, ScotGov doesn’t need a crystal ball – it needs a rear-view mirror.
I am an advocate for flat fares – just in the right circumstances, and at the right level
All that said, I confess that I am an advocate for flat fares – just in the right circumstances, and at the right level. They’re simple to market, they’re instrumental in whittling down pesky dwell times, and they lend themselves to contactless tap-and-cap without the faff of tapping off.
But let’s look at Lothian: even the favourite case study of every Scottish politician doesn’t do what the Greens are asking. Want to travel 12 miles on the 26 from Clerwood to Seton Sands? Fabulous. That’ll be £2 please. Nice and easy. But if you want to travel on the ‘Lothian Country’ X27 between Edinburgh city centre and Mid Calder, cue a sharp intake of breath as the driver breaks the news that the same distance is twice the price.
It’s almost as if rural routes – with their longer mileage and lower patronage – have more challenging economics than urban networks (which is an ideal opportunity for me to plug SYSTRA’s response the Transport Committee’s inquiry on rural connectivity, which you can read online). Lothian can charge £2 in the city because Edinburgh has a critical mass of commuters, tourists, students and shoppers that the corridor to Livingston simply lacks. Plus, comparing urban with urban, buses have a lock on public transport in the capital, whereas in Greater Glasgow they must compete with suburban railways. I could go on – but Edinburgh’s ‘gold standard’ status is the culmination of uniquely favourable circumstances.
In reality, politicians and advocates should beware the allure of single fares. I get why they’re often the headline – it’s an easy way to catch eyes, and one-way prices are often relatively high, especially since they’re directly tied to concessionary reimbursement in Scotland. But most (I’m talking 80-90%) of the minority of Scots who still pay to travel buy multi-journey passes because they offer better value. If, as was witnessed in England, a chunk of existing users convert from daily, weekly or monthly passes to cheaper singles, all you’ve done is shed cash and widened the gap that subsidies (or extra demand) must fill. Hardly a commercial masterstroke. Especially if it could all go up in political smoke just a year or two down the line.
And of course there’s the unfortunate fate of the £500m Bus Partnership Fund: after being ‘paused’ because of choppy fiscal waters, finance secretary Shona Robison confirmed in December that it had been scrapped and would be replaced with a new Bus Infrastructure Fund. She stopped short of naming a number, but it would be a shame if whatever smaller figure she’d originally scribbled in pencil was hastily rubbed out and replaced with an even smaller one – with the cost of a £2 pilot shaved off. It would be the epitome of watering down a long-term solution for the sake of a quick fix.
The full, true impact of capping fares in England will be known in time. As with anything, there will have been benefits and drawbacks – both in the moment and for the future. If it’s determined to follow suit, ScotGov should exercise caution by learning lessons from down the road and from their own experiences closer to home, if only to avoid tough press for themselves and for a still-recovering industry which can ill afford it.
ABOUT THE AUTHOR: Marc Winsland is senior consultant – bus operations at SYSTRA. He was previously commercial manager at bus operator Xplore Dundee.
This story appears inside the latest issue of Passenger Transport.
Beware the allure of capping single fares
by Passenger Transport on Feb 21, 2025 • 11:47 am No CommentsFare caps are an easy way to grab attention, but what happens after they end and could funding be better invested elsewhere?
If there’s one thing politicians love when it comes to talking about buses, it’s a flat fare. They gaze longingly at the likes of London and Edinburgh and sigh, “It could all be so simple.”
And I suppose it doesn’t hurt that a round-pound figure looks nice on a leaflet and sounds good on the campaign trail.
It’s precisely because it struck Downing Street and Great Minster House as a quick win that the English fare cap was born amid the cost-of-living crisis. Former prime minister Boris Johnson saw merit in making bus travel less of a financial burden at a time when fuel prices and energy bills were surging and just about everything else was squeezed by inflation. The government also hoped that cheaper pay-as-you-go travel would entice more people on-board as part of the ever-elusive mission to unlock modal shift. Public approval was quickly expressed, and a three-month trial morphed into a three-year experiment in fares management on a national scale – into which the government will have ploughed £630m by the time it expires at the end of this year.
The proof is in the proverbial pudding: almost 150 operators (representing 90% of the market) signed up, 7-in-10 adults were aware, and patronage grew. The last point (which is arguably the whole point) is where the cap’s efficacy isn’t quite cut-and-dry: its introduction coincided with the economy recovering from Covid, which doubtless means many of those journeys would have come back anyway, cap or no cap. That’s where regional analysis comes in. Growth in London (which wasn’t in the scheme as bus fares are already set below £2 by Transport for London) was 4% in 2023/24. In metro areas outside London, the increase was 7.6% – almost twice as high. And in non-metropolitan counties, where passengers enjoyed the greatest cash savings, the surge was over 10%.
Caveats such as socio-economic differences between London and the rest of England aside, a rough-and-ready analysis could assume that 4% was the neutral, natural ‘do-nothing’ effect – and anything above that was genuine growth which can be credited to the cap. After all, it wasn’t stimulated by higher frequencies or greater network coverage, as national mileage grew by less than 1% in the same period (there’s a whole other piece to be written on the matter of operators expecting passengers to make do with “temporarily” shrunken networks three years after a post-pandemic driver shortage).
However, the government’s own evaluation found that most of those new trips were generated by existing bus users travelling more often, not by a Damascene conversion among motorists. Plus, patronage is still lingering short of pre-Covid levels. A win is a win, yes. But it’s hardly an all-round, all-out victory. The same decision-makers who are too afraid to lift a regressive 15-year freeze on fuel duty must reckon with the reality that sticks (such as London’s congestion charge or Edinburgh’s parking levies) are more effective than carrots (like the cap) in dragging motorists out from behind the wheel.
This is where letting politicians call the shots on something as fundamental as price points carries massive risk: no matter what they say, their horizon is always the next election. And, once even they start to sense they’ve overstayed their welcome, they aren’t averse to saddling their successors with a bind in exchange for a boost. Case in point: the Tories earned some plaudits by making fares cheaper, whilst leaving Labour to inevitably make them more expensive again. Giving things away is much more fun than taking them away. Never mind that £3 is still significantly cheaper than many journeys were in the pre-cap era. Public memory doesn’t work that way. That’s ancient history now. “Get around for £2” might as well have been engraved on Stonehenge at this point.
Let’s circle back to fuel duty: Governments of all stripes are clearly capable of everlasting giveaways they allegedly can’t afford when it suits them. So why are bus passengers in for a rough ride once again whilst motorists drive along easy street? The government might have gotten away with arguing that cheaper bus fares were never going to last forever if only fuel duty hadn’t now been frozen for more than half of my lifetime. If I were to raise this at one of those hypothetical historical dinner parties, I suppose Harold Macmillan would shrug and tell me, “Priorities, dear boy, priorities.”
The challenge for the government now is to map out what happens beyond December 31 2025: is there an off-ramp or is it a cliff-edge? At the moment, the ferocity with which this particular sticking plaster gets ripped off isn’t clear. In the lead-up to the budget, Louise Haigh, the former transport secretary, said the cap would expire but “targeted measures” aimed at young people and rural communities would take its place. She didn’t set out what form these measures would take, but did acknowledge that reliability is a bigger barrier to non-users than cost. Indeed, a survey by Transport Focus in 2023 found that only 1-in-10 non-users said the cap would encourage them to start using the bus.
This calls into question whether £630m was indeed better spent on a short-term gimmick than longer-term investments in priority infrastructure. Making buses quicker and more reliable cuts costs and boosts revenue. Perhaps the route to a commercially viable cap (one that could have been introduced and sustained without subsidies) might have been the state negotiating fare reductions in exchange for time savings. Oh, to live in an ideal world.
Given the English scheme’s mixed success and the political headaches of trying to unpick it, it is perhaps surprising that the Scottish Government granted Green Party wishes for a year-long pilot of a £2 limit in an as-yet-unnamed region. England is already moving upwards from that level and, not so long ago, the Scottish Government had their own fingers burned by reinstating peak rail fares after a pilot to scrap them; they weren’t simply blamed for letting temporary discounts lapse, they were accused of hiking costs for hard-working commuters. Whilst Boris Johnson boldly championed his fares cap, the Scottish Government swithered about affordability – but now appears to have accepted it’s the price of passing a budget. And yet, to see the fate it’s tempting, ScotGov doesn’t need a crystal ball – it needs a rear-view mirror.
All that said, I confess that I am an advocate for flat fares – just in the right circumstances, and at the right level. They’re simple to market, they’re instrumental in whittling down pesky dwell times, and they lend themselves to contactless tap-and-cap without the faff of tapping off.
But let’s look at Lothian: even the favourite case study of every Scottish politician doesn’t do what the Greens are asking. Want to travel 12 miles on the 26 from Clerwood to Seton Sands? Fabulous. That’ll be £2 please. Nice and easy. But if you want to travel on the ‘Lothian Country’ X27 between Edinburgh city centre and Mid Calder, cue a sharp intake of breath as the driver breaks the news that the same distance is twice the price.
It’s almost as if rural routes – with their longer mileage and lower patronage – have more challenging economics than urban networks (which is an ideal opportunity for me to plug SYSTRA’s response the Transport Committee’s inquiry on rural connectivity, which you can read online). Lothian can charge £2 in the city because Edinburgh has a critical mass of commuters, tourists, students and shoppers that the corridor to Livingston simply lacks. Plus, comparing urban with urban, buses have a lock on public transport in the capital, whereas in Greater Glasgow they must compete with suburban railways. I could go on – but Edinburgh’s ‘gold standard’ status is the culmination of uniquely favourable circumstances.
In reality, politicians and advocates should beware the allure of single fares. I get why they’re often the headline – it’s an easy way to catch eyes, and one-way prices are often relatively high, especially since they’re directly tied to concessionary reimbursement in Scotland. But most (I’m talking 80-90%) of the minority of Scots who still pay to travel buy multi-journey passes because they offer better value. If, as was witnessed in England, a chunk of existing users convert from daily, weekly or monthly passes to cheaper singles, all you’ve done is shed cash and widened the gap that subsidies (or extra demand) must fill. Hardly a commercial masterstroke. Especially if it could all go up in political smoke just a year or two down the line.
And of course there’s the unfortunate fate of the £500m Bus Partnership Fund: after being ‘paused’ because of choppy fiscal waters, finance secretary Shona Robison confirmed in December that it had been scrapped and would be replaced with a new Bus Infrastructure Fund. She stopped short of naming a number, but it would be a shame if whatever smaller figure she’d originally scribbled in pencil was hastily rubbed out and replaced with an even smaller one – with the cost of a £2 pilot shaved off. It would be the epitome of watering down a long-term solution for the sake of a quick fix.
The full, true impact of capping fares in England will be known in time. As with anything, there will have been benefits and drawbacks – both in the moment and for the future. If it’s determined to follow suit, ScotGov should exercise caution by learning lessons from down the road and from their own experiences closer to home, if only to avoid tough press for themselves and for a still-recovering industry which can ill afford it.
ABOUT THE AUTHOR: Marc Winsland is senior consultant – bus operations at SYSTRA. He was previously commercial manager at bus operator Xplore Dundee.
This story appears inside the latest issue of Passenger Transport.
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