Research and analysis

£2 bus fare cap evaluation: interim report February 2023

Updated 28 September 2023

Applies to England

The £2 fare cap was launched by the Department for Transport (DfT) on 1 January 2023 and will remain in place until the end of December 2024.

During this period, bus operators can voluntarily implement a £2 cap on eligible single tickets for adults.

The aims of the fare cap are to save passengers money and encourage more people back on the bus.

Monitoring and evaluation

DfT has commissioned an independent evaluation by Frontier Economics and SYSTRA of the £2 fare cap. This report is the second of 2 interim reports before a final evaluation report in early 2024. It sets out emerging trends in key outcomes from the first 2 months of the scheme.

The scheme is still ongoing and it is, therefore, too early to draw conclusions on overall impacts. This interim report is intended to provide an indication of early observations based on preliminary data. It does not assess the contribution of the £2 fare cap to observed trends. This requires more detailed analysis and will be included in the final report.

Data used

This early analysis relies on 5 data sources (including those used in the January 2023 report) that will continue to be used throughout the evaluation.

Ticketer data

Data collected by onboard ticketing software is used to calculate the percentage change in patronage relative to a baseline week in January 2020. It covers around 70% of the market (by patronage). For this analysis, patronage by day of the week and region has been used.

Transport for London (TfL) data

Data collected by TfL on the patronage of public transport in London, including London buses – such as the Ticketer data – is collected at a daily frequency.

Operator data

Bus operators have submitted monthly data to DfT on ticket sales and associated revenues across individual ticket types, for 2019 and 2022, as well as January and February 2023.

Panel survey data (2 waves of the 4 planned waves)

Two waves of a national panel survey with a sample of 4,000 bus users and non-users have been carried out. The first wave was in December 2022 before the scheme started and the second wave was in the first 2 weeks of February 2023 to gather month 1 insights (and was reported on in the first interim report).

A further 2 waves will be undertaken over the coming months.

Transport Focus survey

Transport Focus carried out 2 waves of a survey focused on awareness and impact of the £2 fare cap in January and March 2023.

Operator participation

In phase 1 (from January to March 2023), 148 operators voluntarily joined the scheme representing around 90% of the total market in England (by patronage). This includes 5 large operators (Arriva, Go Ahead, National Express, Stagecoach and First), along with 21 larger small and medium-sized enterprise (SME) bus operators and 72 smaller SMEs. The majority of operators not signed up for the scheme do not meet the eligibility criteria.

Between the first (January to March 2023) and second (April to June 2023) phases of the scheme, operator participation has remained largely unchanged. Nine operators withdrew from the scheme and 6 new operators joined, resulting in a total of 145 operators participating in phase 2.

Observations from the first 2 months of the £2 fare cap scheme

Around two-thirds of people reported some degree of awareness of the £2 fare cap

Around 7 in 10 survey respondents to the wave 2 panel survey carried out in February 2023 reported an awareness of the scheme (69%). This is supported by the findings from the separate Transport Focus survey carried out in March 2023 that found over half of people (59%) were aware of the £2 fare cap and a further 12% were somewhat aware. Transport Focus also found a slight increase in awareness between January and March 2023.

Patronage appears to be continuing to recover following the COVID-19 pandemic and early evidence suggests the £2 fare cap may be playing a role in this recovery

Analysis of Ticketer data for January and February 2023 suggests year-on-year patronage has increased by 20%. When comparing January and February 2023 to the period before the scheme was implemented (October to November 2022 to avoid the Christmas and New Year period), patronage decreased by 3%. This represents a smaller decrease in patronage than is usually seen during this period historically.

While it is currently too early to determine the contribution of the £2 fare cap to any patronage change, indicative signs from previous survey data suggest it is playing a role in increasing or maintaining patronage:

• almost 1 in 5 people who reported they were aware of the £2 fare cap in the Transport Focus survey (March 2023) said it had increased their use of the bus
• of respondents to the wave 2 panel survey who had undertaken more journeys since the introduction of the £2 fare cap, a third said the fare cap was the only reason they had made additional journeys and almost half said it was the main reason

There has been an increase in the number and proportion of single bus journeys

Preliminary analysis of data shared with DfT by operators suggests that more than 50 million single tickets were sold over January and February 2023, over 34 million (around two-thirds) of which had a previous fare of over £2 and were, therefore, subject to the £2 bus fare cap.

Single tickets, including those with a previous fare both above and below £2, accounted for a higher proportion of ticket sales in January and February 2023 compared to 2022. This suggests that some usage of the £2 fare cap scheme could be accounted for by passengers switching between ticket types to save money.

People making additional bus trips with the £2 bus fare cap in place are likely to be existing bus users and make a small number of additional trips

Overall, 10% of respondents to the wave 2 survey reported taking more journeys by bus since the £2 fare cap was introduced. This is in line with findings from the Transport Focus March 2023 survey, which found 11% reported higher bus use.

Additional analysis of the data found that of those who reported taking additional journeys, 24% reported that this was less than once per week.

Of those undertaking additional journeys at least once a week, 40% reported between 1 to 2 additional bus trips per week and a similar proportion (38%) reported between 3 to 5 additional bus trips.

Frequent bus users who undertake journeys by bus at least once per week are more likely than those who undertake journeys by bus less frequently or not at all, to report undertaking more journeys by bus since the £2 fare cap was introduced.

The scheme is perceived as making a positive impact on the cost of living

As previously reported in the first interim report, around 30% of respondents to the wave 2 panel survey said that the £2 fare cap has had a positive impact on their disposable income and income for other expenses. This is supported further by the latest Transport Focus survey, which found that 8 in 10 respondents agreed that the fare cap will help people with the cost of living. More than 4 in 10 thought it might help them save money personally.

In both surveys, the scheme was perceived to have the relatively largest impact on the cost of living for people in younger age groups.

Next steps

This short report sets out early observations from the first 2 months of the scheme. The evaluation will continue over the coming months and provide richer conclusions on its effects along with a value-for-money evaluation of the scheme in early 2024.