£4.7bn of reallocated HS2 funding to be spent across North and Midlands

The Government says millions of people in the North and the Midlands will benefit from better public transport, reduced congestion and upgraded local bus and train stations thanks to the new £4.7 billion Local Transport Fund announced today (26 February). 

Prime Minister Rishi Sunak and Transport Secretary Mark Harper have confirmed that the North will receive £2.5 billion and the Midlands will receive £2.2 billion from April 2025 to improve local transport connections that so many people rely on every day, particularly across smaller cities, towns, and rural areas.  

This spending – announced as part of Network North – will deliver what the government calls an unprecedented long term funding uplift across the North and Midlands over seven years. It’s the first transport budget of its kind that’s specifically targeted at smaller cities, towns and rural areas and the government says it “empowers local people and local leaders to invest in the transport projects that matter most to their communities – helping create jobs, grow the economy, and level up the country”. 

It says over the seven years as a whole this funding will be on average at least nine times more than these local authorities currently receive through the local integrated transport block which is the current mechanism for funding local transport improvements in their areas.

The Local Transport Fund will be made available from 2025 to give local authorities enough time to develop their funding plans and prepare to hit the ground running to ensure they are delivered as soon as possible.

Prime Minister Rishi Sunak said: “We have a clear plan to level up our country with greater transport links that people need and deliver the right long term change for a brighter future.

“Through reallocating HS2 funding, we’re not only investing billions of pounds directly back into our smaller cities, towns and rural areas across the North and Midlands, but we are also empowering their local leaders to invest in the transport projects that matter most in their communities – this is levelling up in action.  

“The Local Transport Fund will deliver a new era of transport connectivity. This unprecedented investment will benefit more people, in more places, more quickly than HS2 ever would have done, and comes alongside the billions of pound worth of funding we’ve already invested into our roads, buses and local transport services across the country.”

The government adds the spending “will give local authorities long term certainty to invest in transformative and ambitious transport improvements from 2025 through to 2032” including: 

  • Building new roads and improving junctions
  • Installing or expanding mass transit systems
  • Improving roads by filling in potholes and better street lighting for personal safety 
  • Improving journey times for car and bus users by tackling congestion
  • Increasing the number of EV chargepoints
  • Refurbishing bus and rail stations
  • Improving our streets so they are safer to walk children to school and increasing accessibility for all.

To ensure local authorities can make the most of this unprecedented funding, the Department will publish advice for local councils and transport authorities to help them develop ambitious plans to improve local transport infrastructure in their areas.

Councils will work with local MPs and will be held to account by the government as well as their communities to make sure the money is spent promptly and effectively. Local councils will be expected to publish their delivery plans for which projects they wish to invest in.

Transport Secretary Mark Harper said: “Today’s £4.7 billion investment is truly game-changing for the smaller cities, towns, and rural communities across the North and the Midlands and is only possible because this Government has a plan to improve local transport and is willing to take tough decisions like reallocating funding from the second phase of HS2.  

“This funding boost will make a real difference to millions of people, empowering local authorities to drive economic growth, transform communities, and improve the daily transport connections that people rely on for years to come.”  

The government adds that today’s funding is directed to the North and Midlands because the majority of HS2 savings are specifically from those regions. The Local Transport Fund is also specifically for communities in the North and Midlands which are outside City Regions which receive City Region Sustainable Transport Settlements (CRSTS). 

The new funding allocations means neighbouring authorities who were not eligible for CRSTS can now drive forward similar infrastructure improvements, and all local authorities in the North and Midlands will now have long-term settlements from Network North to boost local transport. 

The North East is separately receiving £3.7 billion from CRSTS from now until 2032, which includes an uplift of more than £1 billion from Network North, boosting local transport across the Tees Valley and the North East. 

(File picture supplied by TfL)


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