Changes to employer National Insurance have added an estimated £110 million a year to the bus industry’s costs, equivalent to a 2.4% increase in payroll costs, according to the latest Confederation of Passenger Transport Cost Monitor.

The report found that employer National Insurance costs rose by 33.1% between February 2025 and February 2026 following the changes introduced by the Government in April 2025. Overall labour costs increased by 4.1%.

Operators have sought to offset these additional costs by finding savings elsewhere. Vehicle running costs fell by 4.4%, while overhead costs were reduced by 9.5%. Despite those efforts, however, total operating costs across Great Britain outside London rose by 2.9%, from £58.76 to £60.45 per bus hour.

Cost Monitor also found that average bus speeds across Great Britain fell by 2.7% over the year, further affecting 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.”

Labour remains the largest component of bus operating costs, accounting for 57.8% of the total. The report also found that engineering costs rose by 28%.

The figures provide a snapshot from February 2026 and therefore predate the Middle East crisis and the subsequent sharp increases in fuel prices.

The latest Cost Monitor draws on returns covering 65% of the bus fleet and almost 85% of bus mileage operated across Great Britain outside London.

(Picture: Confederation of Passenger Transport)