The funding, which started on Wednesday, January 1, aims to prevent bus fare increases for passengers across England.
This initiative is part of the government’s Plan for Change, which seeks to increase disposable income for the public.
The investment ensures that single bus fares on designated routes remain capped at £3 until the end of 2025.
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This is expected to benefit rural communities and towns heavily reliant on buses.
Local transport minister Simon Lightwood said: “Buses are vital to help people get to work, the doctor, or see their friends and family—they boost growth, support communities and provide opportunity.
“That’s why we’re stepping in to make sure fares are capped at the lowest point possible, saving people up to 80 per cent on travel and ensuring that our buses continue to be an attractive, affordable way to get around.”
Under the new cap, passengers could save up to 80 per cent on some routes.
Local authorities and Metro Mayors can also fund their own schemes to maintain fares below the £3 cap.
The government’s intervention is in addition to the £955m already invested to improve bus service frequency and reliability across the country.
The investment will help prevent a price hike for millions of passengers, keep fares affordable, and improve access to opportunities, particularly in towns and rural areas.
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This move comes amid a decline in bus services across the country, with thousands of vital services slashed and passenger numbers dropping since 2010.
The government is also progressing the Bus Services Bill through Parliament, which aims to allow local authorities to establish their own bus companies and franchises.
The bill was introduced on December 17, 2024.
This will make it easier for local authorities to own services and shape routes to better serve local people, putting buses back at the heart of communities.
The government hopes its efforts will reverse the four-decade-long decline in bus services and provide communities with access to reliable and affordable transport.