Statement to Parliament: Local Transport Fund: transforming the North and Midlands

Published: 26 February 2024
By Chris Haycock

I am pleased to inform the House that my department has today published details of the new £4.7 billion Local Transport Fund dedicated to transport funding across the North and Midlands. The Local Transport Fund delivers on a commitment made in our Network North plan and is paid for by savings from High Speed 2 (HS2).

As the Prime Minister committed, every pound of the £36 billion that would have been spent on HS2 phase 2 will be invested into transport improvements that benefit far more people, in far more places, far more quickly. Every penny of the £19.8 billion committed to the Northern leg will go to the North and every penny of the £9.6 billion committed to the Midlands leg to the Midlands, with the £6.5 billion saved by our new approach to Euston benefitting the rest of the country.

We are sticking to our plan to level up communities with greater transport links right across the UK for a brighter future. Our plan will ensure 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. £2.5 billion will go to the North and £2.2 billion to the Midlands across the next 7 years (2025 to 2032).

Larger combined authorities in the North and Midlands have already had confirmation of significant extra funding – with a further £8.5 billion increase to the City Region Sustainable Transport Settlements paid for by HS2. We are extending this successful model to all local authorities in the North and Midlands through the Local Transport Fund, providing the first transport budget of its kind for our smaller cities, towns and rural areas.

This is an historic level of funding for these councils. The new funds can pay for the infrastructure that communities really want: from new roads to new mass transit systems, more electric vehicle (EV) chargepoints or refurbished bus and train stations, to filling in potholes. It will be for locally elected representatives – councils, working with local MPs, not Whitehall – to decide how to spend this money and they will be accountable to their voters for how they do. The local knowledge of Members of Parliament will be vital, so I am requiring councils to consult their local Members of Parliament before spending this new funding. The funding is available from next year – giving time for councils to develop plans for this unanticipated funding boost.

This announcement builds on our progress of delivering reallocated HS2 spending into new transport schemes across the country. We have extended the national £2 bus fare cap. We announced the first down payment of a £1 billion investment in buses, with £150 million being allocated over the next year across the North and Midlands. We set out details of our new £8.3 billion road resurfacing fund, with the first £150 million already reaching local authorities.

Details of the total funding each local transport authority will receive are published on GOV.UK. The Local Transport Fund is in addition to local transport funding from the last Spending Review and to what local transport authorities were expecting to receive in future. The government will publish the annual allocations for this fund in due course. To ensure local authorities can make the most of this unprecedented funding, government will publish advice for local authorities. We will ask local authorities to determine their local transport priorities and develop delivery plans, by Autumn 2024, for projects to be funded by the Local Transport Fund. The Local Transport Fund is predominantly capital. It will include a resource element to ensure local authorities can deliver their plans. We will support local authorities as they develop their plans so that they are ready to deliver improvements with the Local Transport Fund from April 2025.