Following the UK Government’s Budget 2025 announcement, a look through the Treasury’s document reveals that railway fares will be frozen, the £3 bus fare cap will be retained, funding will be provided for new railway improvements, support will be given to Transport for London’s plan to extend the Docklands Light Railway (DLR) to Thamesmead, primarily funded by London with long-term government contributions, and in Ireland, €2 billion from the Irish Government’s Infrastructure, Climate and Nature Fund will support the construction of MetroLink, reflecting its scale and national importance.
Budget 2025
1.4 Taking decisive action to cut the cost of living and bring down inflation
Families across the UK are feeling the squeeze of still too high inflation. The Budget delivers a set of measures to remove around £150 of costs on average from household energy bills from April next year.
Energy costs will be reduced by the ending of the Energy Company Obligation, which is currently funded through bills, and through the government funding 75% of the domestic cost of the legacy Renewables Obligation for three years. This is on top of extending the £150 Warm Home Discount to a further 3 million of the poorest households.
And the Budget goes further by:
Introducing a one-year freeze of regulated rail fares – for the first time in 30 years – saving commuters on the more expensive routes more than £300 per year.
3.1 Cost of living
Bearing down on prices
Transport costs represent 14% of household spending. To bear down on the cost of travelling by rail, the government is freezing all regulated rail fares in England for one year starting from March 2026, saving the average passenger £300 per year on the most expensive routes. This is the first time the government has frozen regulated rail fares for a year in 30 years and means passengers will not see any changes to the price of season tickets, peak return fares for commuters and off-peak returns between major cities until March 2027. This builds on the government’s previous decision to extend the £3 bus cap to March 2027, covering 5,000 bus routes.
Government action bearing down on prices
Freezing rail fares
Extending £3 bus cap to March 2027
Household saving
£300 off rail fares in England on the most expensive routes in 2026-27.
Making 5,000 bus routes in England more affordable.
Supporting every region to prosper
The government is committed to the success of Derby and the wider East Midlands. The government has made this clear through major transport and local growth funding, investing £2 billion through Transport for City Regions and over £100 million through the Local Growth Fund, alongside the decision to place Great British Railway’s headquarters in Derby, and investment in the next generation of nuclear technology with Rolls-Royce. The government will build on this progress by backing the Team Derby initiative, working in partnership to maximise the ongoing government investment in Derby.
The government welcomes confirmation that London will deliver the DLR extension to Thamesmead, funded through Transport for London (TfL) and Greater London Authority (GLA) borrowing. The majority of the costs will be met by TFL and GLA, with the government also contributing over the long term. The government will continue to work with London to finalise funding details and will continue to work with the GLA to look at options for innovative financing to support the delivery of infrastructure projects in the capital.
The Lower Thames Crossing is the largest roadbuilding project for a generation, and a key driver of growth, improving links between the Midlands, the North and key ports in the South East, as well as improving the resilience of the overall road network. The government has committed a further £891 million to complete the publicly-funded works for the Lower Thames Crossing, the final tranche of government support to enable the private sector to take forward construction and long-term operation. The government’s preferred financing option at this stage is the Regulated Asset Base (RAB) model. The project will be taken forward on that basis, with formal market engagement launching in 2026.
Alongside the new Northern Growth Corridor (see Box 3.C below), the government is accelerating progress on the Oxford to Cambridge Growth Corridor. In October, the government announced over £500 million of support for the region to unlock growth and accelerate opportunities, alongside a £10 billion private sector investment by the Ellison Institute of Technology at its Oxford site. This, alongside East West Rail, new reservoirs and the first AI Growth Zone, will help drive the Corridor to reach its true potential. The government has also identified Tempsford in the Oxford to Cambridge Growth Corridor as a promising site for one of at least three new towns (alongside Leeds South Bank and Crews Hill) to unlock economic growth and accelerate housing delivery.
Box 3.C: The Northern Growth Corridor and wider North
Major investments in Northern city regions via the Transport for City Regions Fund, the Local Innovation Partnership Fund and the series of commitments announced at the Regional Investment Summit, underline the government’s commitment to driving growth in the North as a major element of its overall growth mission.
The government has appointed Tom Riordan as its envoy for the Northern Growth Corridor and will set out an overarching plan for the Corridor in early 2026. Developing and delivering this plan will be done in partnership with local leaders, universities and Northern businesses and will build on the huge assets in the corridor and wider North, to grow the economy, attract inward investment and create a complementary economic hub to London and the South East.
Delivering infrastructure
The government is committed to improving infrastructure and rail connectivity across the North of England, including through the £11 billion Transpennine Route Upgrade currently being delivered. City Region Sustainable Transport Settlements (CRSTS) are already delivering transformational benefits to local transport in major cities, and the further £15.6 billion committed via the Transport for City Regions Fund will allow places to continue this work. Through these funds, mayors are investing in projects, including South Yorkshire investing in renewing its Supertram network, in Greater Manchester extending the Metrolink to Stockport, in Liverpool City Region investing £97 million in a new bus fleet, and in West Yorkshire a £45 million scheme creating a multi-modal gateway at Leeds Rail Station.
5.2 Getting inflation down and tackling the cost of living
Rail fares freeze – The government is freezing all regulated rail fares in England for one year starting from March 2026. This means passengers will not see any changes in the price of season tickets, peak return fares for commuters and off‑peak returns between major cities until March 2027.
5.6 Local growth and devolution
DLR extension to Thamesmead – Supporting Transport for London’s (TfL) plan to extend the Docklands Light Railway (DLR) to Thamesmead, funded through TfL and Greater London Authority (GLA) borrowing. The majority of the costs will be met by London, with the government also contributing over the long term.
Funding for the Lower Thames Crossing in 2027-28 and 2028-29 – The government is committing a further £891 million to complete the publicly funded works for the Lower Thames Crossing, as part of its staged approach, after which the private sector will take forward construction and long-term operation.
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During the same day, in the Republic of Ireland, Minister for Transport Darragh O’Brien secured Cabinet approval for a €24.3 billion Sectoral Investment Plan for Transport 2026–2030.
Let’s take a look at the press release on the investment in improved public transport in Ireland.
Indicative allocations and priorities for key sectors from 2026 to 2030 are:
Public Transport:
The allocation of approximately €10.1 billion will: protect and renew the heavy rail network; support the replacement of the existing DART train fleet; deliver Phase 1 of the Cork Area Commuter Rail Programme and start Phase 2; and commence construction on both the DART+ programme and the Western Rail Corridor. Under BusConnects, the purchase of new electric buses will continue, there will be the construction of multiple Core Bus Corridors in Dublin, and construction works should start in Cork and Galway.
In addition, €2 billion from the Government’s Infrastructure, Climate and Nature Fund will support the construction of MetroLink, given its unique scale and importance for the country.
Road Networks and Road Safety:
The approximately €9.7 billion investment in roads will: protect and renew our existing road network, deliver many new national road projects, mitigate seasonal and climate-related impacts; roll out EV charging infrastructure; and deliver new strategic regional roads and bypasses.
The Plan details major national roads projects – those with an estimated cost range over €200 million – which are expected to start construction or procurement by 2030. This detail is to provide clarity for both citizens and contractors on the procurement and construction activity over the next five years.
Smaller projects under the €200 million threshold, such as the Mallow Relief Road or Ardee Bypass, are not specifically listed but are also expected to enter construction by 2030. Similarly, while the majority of regional and local roads funding is dedicated to protection and renewal of the existing network, strategic projects which are expected to entre construction by 2030 are also listed.
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Overall, the UK Government’s Budget 2025 outlines a series of targeted transport and cost-of-living measures, including a freeze on regulated rail fares and the retention of the £3 bus fare cap, alongside continued investment in regional growth and major infrastructure projects. On the same day, the Republic of Ireland set out its own long-term priorities with the approval of a €24.3 billion transport investment plan for 2026–2030, focusing on rail modernisation, public transport expansion and strategic road upgrades. While the two announcements are separate and reflect different national priorities, both signal a continued emphasis on improving transport networks and supporting future economic development.
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Further reading
Suggestion: Why I Believe That Transport Fares Should Be Consulted
