A report published by the Confederation of Passenger Transport (CPT) has found that recent changes to employer National Insurance have added an estimated 110 million GBP a year to the bus industry’s costs – equivalent to a 2.4% increase in payroll costs.
The latest Confederation of Passenger Transport Cost Monitor found that employer National Insurance costs rose by 33.1% between February 2025 and February 2026 following changes introduced by the government in April 2025, resulting in increases in overall labour costs of 4.1%.
In order to offset these additional costs, operators have worked to source alternative savings elsewhere, with vehicle running costs falling by 4.4% whilst overhead costs were reduced by 9.5%. However, despite this, total operating costs across Great Britain outside London rose by 2.9% from 58.76 GBP to 60.45 GBP per bus hour.
The Cost Monitor also found that average bus speeds in and across Great Britain saw a reduction of 2.7% over the year, further affecting both efficiency and productivity.
Graham Vidler, Chief Executive of the Confederation of Passenger Transport, said:Bus operators have worked relentlessly to manage rising costs while protecting the services that millions of passengers rely on. They have reduced overheads, made savings and become more efficient wherever possible.
But there is a limit to what the industry can absorb. The Government’s changes to employer National Insurance alone have added an estimated £110 million a year to operators’ costs, equivalent to a 2.4% increase in payroll costs.
These figures were also recorded before the latest fuel price increases hit the industry. Operators are now facing a perfect storm of higher employment costs, rising fuel bills and continued pressure from congestion and slower bus speeds.
Government must recognise these pressures in future funding and tax decisions. A stable, long-term approach is essential if operators are to protect services, keep fares affordable and continue investing in better buses for passengers.
Currently, labour remains the largest component of bus operating costs, accounting for 57.8% of the total, with engineering costs also having risen by 28%.
The Cost Monitor itself draws on returns covering 65% of the bus fleet, as well as almost 85% of bus mileage operated across Great Britain outside of London.
