I am delighted at the announcement that local authorities are to receive additional funding for transport initiatives. Please read below the Transport Secretary's letter that I have received today (26 February 2024):
Dear Colleague
Improving everyday local journeys for people
Today I am announcing an unprecedented increase in transport funding for your area. The Local Transport Fund delivers on a commitment made in our Network North plan and is paid for by savings from HS2. It is mostly capital funding, with a limited amount of revenue funding to ensure local authorities can deliver their plans. Please see attached the full allocations being confirmed today.
For areas with new devolution deals including local transport powers, funding will be paid to the new combined authority to prioritise spending across the combined authority area, once it is established.
As the Prime Minister committed, every pound 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 seven years (2025-2032).
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 savings. 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 a 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 EV charge-points 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. As a Member of Parliament, your local knowledge will be vital, so I am requiring councils to consult with you 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. The Local Transport Fund presents an unprecedented opportunity to improve local transport for your constituents and I know you will ensure your local authority is making the most of this new funding.
Rt Hon Mark Harper MP Secretary of State for Transport