October 17 2025
Bus and coach operators have warned the Treasury that after being hit by substantial cost pressure over the last year, they cannot absorb any further tax hits without cutting day-to-day bus services.
Buses carry 11 million passengers a day. Passengers arriving by bus spend almost £40 billion a year in shops, cafes, restaurants and leisure destinations, and those who rely on the bus to get to work add £72 billion a year to the economy.
In a submission ahead of the Autumn Budget, the Confederation of Passenger Transport has emphasised several factors impacting operators – higher National Insurance contributions, above average wage increases and uncertainty over future reimbursement levels for England’s bus fare cap.
The CPT says bus and coach operators have worked hard to absorb additional costs without reducing services. However, the sector cannot absorb further fiscal pressures without impacting day-to-day delivery – most likely in the form of reducing services, which would become simply too expensive to deliver.
Bus and coach operators were not consulted about, or prepared for, the Chancellor’s changes to National Insurance employer contributions in last year’s Budget, which came into effect on April 1st. The impact of the change was about £900 per bus driver per year, totalling £100 million for the industry as a whole.
Alongside that, the national minimum wage has increased by between 6.7% and 18% - putting upward pressure on wages across the board. Typical pay for a bus driver has risen by nearly 30% over the last three years – outstripping an increase of 21.6% for UK average wages. This has added significant costs to an industry which employs 105,000 people, in which wages account for half of all costs.
Another significant factor has been England’s fare cap, which was initially £2 before rising to £3 this year. The cost of the cap is reimbursed to operators through a settlement with the Department for Transport, but operators do not yet have certainty over their individual levels of reimbursement for 2026.
Graham Vidler, Chief Executive of the Confederation of Passenger Transport, said: “The bus and coach industry needs financial stability. Another fiscal shock after last year’s national insurance hike would leave operators with no choice but to cut services, which would be felt by bus passengers up and down the country.
“Buses are the country’s favourite form of public transport, carrying 11 million passengers every day. They are essential in fulfilling the Government’s core mission of driving economic growth, and anything that jeopardises them would be a retrograde step.”
Every pound invested in buses delivers £4.55 of value to the environment, to the health of the nation and to communities. CPT welcomes the Spending Review’s recognition earlier in the year of the vital role played by buses in achieving the Government’s missions.
In its submission, CPT argues for adequate funding to enable full reimbursement of the £3 national bus fare cap and for a target of improving bus speeds nationwide by 10% - which would unlock commercial investment in improved services.
CPT also calls for the coach sector to receive its fair share of zero emission infrastructure – including charging points – and research and development funding, to enable an equitable transition to environmentally friendly technology for all parts of the transport sector.