Burnham's £500m Bus Fare Plan Sparks Backlash Over £400m Climate Funding Switch

Prime Minister Andy Burnham's plan to reinstate England's £2 cap ($3)on single bus fares has drawn criticism after the government confirmed the scheme will be funded partly by redirecting hundreds of millions of pounds previously allocated to international climate projects.

The government said the fare cap will return across England from January 2027 and remain in place throughout the year at a cost of more than £500 million ($669 million).

Around £400 million ($535 million) will come from replacing grants for international climate projects with loans, while the remainder will come from Department for Transport funding already allocated to buses.

Ministers said the changes would allow the government to support domestic cost-of-living measures without abandoning international climate commitments.

The funding decision has prompted criticism from development charities and opposition politicians, who argue replacing grants with loans could increase debt for poorer countries while raising broader questions about the government's spending priorities.

Burnham defended the move, saying it reflected a broader effort to 're-prioritise' public spending.

Re-Prioritising Public Spending

The government said £454 million ($607 million) would be reallocated from the Department for Energy Security and Net Zero, with around £400 million ($535 million) coming from restructuring international climate support.

Burnham said the decision reflected a broader effort to 're-prioritise' government spending.

'This phase of government is about re-prioritising,' he said, arguing resources should be directed towards helping working families manage transport costs.

Downing Street said some international climate grants would be replaced with loans rather than eliminated altogether, arguing the approach would make better use of public money while continuing to support overseas climate initiatives.

Development organisations argued the change would leave poorer and more climate-vulnerable countries with greater debt burdens because loans do not provide the same level of support as grants.

ActionAid UK warned replacing grants with loans risked 'penalising those most impacted by a climate crisis they did not create,' while Bond said domestic cost-of-living measures should not come at the expense of international development funding.

Bus Fare Cap Returns in January

The £2 cap will apply to participating bus services across England outside London, where a separate £1.75 ($2.34) single fare already operates. Scotland, Wales and Northern Ireland will receive additional funding but will not be required to introduce the same fare cap.

Ministers said lower fares would help ease the cost of living while encouraging greater bus use.

The policy revives a scheme first introduced in 2023 to support passengers and encourage people back on to public transport following the pandemic.

An official evaluation found the original scheme accounted for around 5% of a 13% increase in bus use during its first 10 months, particularly benefiting lower-income passengers, although it was considered less effective in areas where fares had already been relatively low.

Opposition Questions Funding Strategy

Opposition politicians welcomed efforts to reduce transport costs but questioned both the funding mechanism and the temporary nature of the scheme.

Shadow Chancellor Mel Stride said ministers had yet to explain fully how the policy would be financed, arguing the government should provide greater clarity over its spending plans before announcing further cost-of-living measures.

The debate has centred on whether replacing overseas climate grants with loans is an appropriate way to fund domestic cost-of-living measures, a position ministers continue to defend as part of their wider spending priorities.