Transport Secretary Louise Haigh gives update on future of £3 bus fare cap

It was announced at the Budget the cap on bus fares will go up from £2 to £3 at the start of next year through the end of December 2025. Fares less than £3 will only rise by inflation.

The £3 cap on single bus fares could be targeted at younger people and rural areas from 2026, Louise Haigh has suggested.

The Transport Secretary hinted that rather than extending the overall cap once more the government will explore other options in the coming year. Last month it was confirmed at the Budget the cap would be extended - costing £150million.

But it was announced the cap will also go up from £2 to £3 at the start of next year through the end of December 2025. Fares less than £3 will only rise by inflation.

Ms Haigh told Sky News's Trevor Phillips: "The plans we inherited would have ended the cap completely on December 31. We've stepped in with funding to protect (the cap) at £3 until the 31st of December next year, and in that period, we'll look to establish more targeted approaches."

"We've, through evaluation of the £2 cap, found that the best approach is to target it at young people.

"So we want to look at ways in order to ensure more targeted ways, just like we do with the concessionary fare for older people, we think we can develop more targeted ways that will better encourage people onto buses."

Pressed on whether there will not be a single cap after December 2025 but subsidies will be targeted at certain groups of people, she replied: "That's what we're considering at the moment.

"As we go through this year, as we have that time, whilst the £3 cap is in place, because the evaluation that we had showed it hadn't represented good value for money, the previous cap."

It came as the Transport Secretary also revealed where £1 billion in funding will go to deliver London-style buses nationwide as part of a massive Budget boost. She confirmed £712 million in funding for local authorities to improve services, alongside a further £243 million for bus operators.

Areas receiving an "unprecedented" amount of funding include Peterborough, the Isle of Wight, Torbay, Cambridgeshire, Leicester and Torbay.

Speaking on Sunday, she said: "If you live in a lot of small towns or villages, you've not got a bus before 9am or after 5pm and that's what stops people catching the bus."