Bus services: These areas are set to get cut of £1bn fund to boost services – as minister hints £3 fare cap will be scrapped

The government has revealed where £1bn in funding will go to deliver London-style buses nationwide as part of a massive Budget boost.

Transport secretary Louise Haigh announced £712 million in funding for local authorities to improve services, alongside a further £243 million for bus operators.

Ms Haigh said the investment would end “complicated and inconsistent” funding models that have impacted passengers for years.

She added the government has considered targeting the fare bus cap rather than maintaining the £3 cap beyond the end of 2025.

“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,” she told Sunday Morning with Trevor Philips.

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Areas receiving an “unprecedented” amount of funding include Peterborough, the Isle of Wright, Cambridgeshire, Leicester and Torbay.

Combined authorities representing South Yorkshire and Liverpool City region will receive £17 million and nearly £21 million respectively.

A new allocation model has been put in place which will take into account an area’s levels of deprivation and population. In previous years local authorities would have to compete for funding.

“Too often, passengers are left waiting hours for buses that don’t turn up – and some have been cut off altogether,” Ms Haigh said.

“That’s why we’re reforming funding to deliver better buses across the country and end the postcode lottery of bus services.”

Alongside the big spend, the government will also set aside £150 million to cap fares at a maximum of £3.

An inflationary limit will also be set to ensure other fares are not automatically increased to £3. The cap will run until the end of 2025.

Single bus fares in England have been capped at £2 outside London, where they are £1.75 per journey, for most routes since January 2023.

Raising the bus fare cap from £2 to £3 has been met with some opposition.

However, the transport secretary said not all bus fares will go up to £3.

Louise Haigh told Sunday With Laura Kuenssberg: “So we stepped in to protect the cap at £3. Which means that for rural routes, in particular, where the bus fares could have leapt back up to £13 or £14 in some instances, we’re keeping it at much lower, at £3.

“But crucially, for fares in cities where previously, the fare might have been even less than £2, we’re setting it so that operators can’t raise fares in line more than in line with inflation, so we wouldn’t expect all fares to rise to £3. That is a maximum amount.”

The government said every region in England will benefit from the funding, but particularly areas which have been historically underserved. Here is a list of the announced areas: