As per London, Paris and many other places, franchising is the way forward now, with the council subsidising public transport as much as they like - a few areas are even free. It also disposes with single/return fares and replaces them with 60 or 90 minutes zonal tickets in a single direction or day/week/month unlimited travel in zones. You can then use what ever combination of journeys you need by any mode. Rail use often has a premium charge and time of day may apply.
With the pressures on council budgets from Adult & Child social care, home to school transport and Special Education Needs, 'as much as they like' is more likely to be 'as little as possible'. Forget about what happens in London, Paris and many other places - in many areas you'll probably be fighting for anything above the very minimum level of service and maximum level of fares that can be got away with.......
I have a memory which might not be correct that it was first introduced suspiciously close to local government elections. I would suggest in an attempt to shore up the rural elderly Tory vote who had noticed their bus services being withdrawn.
Hopefully franchising or the threat of it will actually allow joined up thinking.
The elderly get bus passes, so by and large are not affected by capping anyway. The cap was introduced as relief to the 'cost of living crisis' - in theory giving cheaper bus fares to everyone, but mainly to those at the poorer end of the scale and more likely to be suffering i.e. bus users . In the time available there was no possibility of a nuanced scheme (the govt. not controlling commercial bus services); it had to be something easy to administer and likely to be accepted by the bus operators.
Unless there is more money on the table, franchising, or the threat of it, is going to achieve little. The laws of economics cannot be suspended for public transport.
My local bus company serving the routes I sometime use dropped out of the capping scheme a couple of years ago. So no change here just north of Hereford
This is, however, a fairly unusual scenario.