Lowering the cap from £3 is set to cost £500million - funded by changing Net Zero investment into loans

Single bus fares across England will be capped at £2 from January, Andy Burnham has announced.

The nationwide cap is currently set at £3 until the end of March 2027.

But some areas - including London and Greater Manchester, where Mr Burnham set a £2 limit as Mayor - have lower top rates for single tickets.

Mr Burnham said: “Good, affordable transport links are an essential. No one should be priced out of those and left behind.

“But for too long people have said that cheaper transport isn't an option. I don't accept that. I've done it before and I will do it again now: a £2 cap on bus fares for millions across the country.

"Lower fares will help people get to where they need to - giving them breathing space to help with the cost of living."

The measure is backed by £454 million of funding - including money to allow devolved governments to take similar action.

Some £400 million of that funding will come from switching investment in international climate finance to loans, with the rest from savings in the Department for Energy Security and Net Zero budget.

The total cost of the scheme is expected to be more than £500 million, with the rest coming from Department for Transport (DfT) funding already allocated to buses.

Chancellor John Healey said millions of people would benefit from the measure and has insisted the cap is funded.

He said: "This action to ease the cost of living is funded by savings made elsewhere, so there's no burden to British taxpayers, just pounds going back into their pockets."

And Transport Secretary Heidi Alexander said it would make "everyday journeys easier and cheaper".

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"We're cutting fares by a third to help with the cost of living, open up opportunities and keep people connected to work, school, healthcare and their friends and family," she said.

The Government is also supporting six mayoral authorities to set up bus franchising, similar to the Bee Network in Mr Burnham's former Greater Manchester mayoralty.

The Conservatives introduced the scheme years ago, but in the first 10 months alone, the DfT spent £210 million reimbursing bus firms across the country for the discount.

The cap was then raised under Labour to £3 from January 2025.

Jason Prince, the director of Urban Transport Group - Britain's network of transport authorities - said the Government was "recognising the value of the bus" as he welcomed the fare caps.

He said: "Cheaper fares not only make bus travel more affordable but they can help to significantly drive passenger numbers, so this is a welcome intervention for both bus users and local communities."

Andy Burnham campaigned for lower public transport fares throughout the Makerfield-by-election.

In June, Mr Burnham said: "In an ideal world, I would like to cut the cost of public transport as low as possible.

"I have made it free for 16 to 18-year-olds and recently removed the 9.30am restriction on older and disabled people's bus passes. I will try to keep the £2 capped bus fare for as long as I possibly can."