North and Midlands to share £4.7bn Local Transport Fund

The government has announced details of the Local Transport Fund for the North and Midlands, which will be made up of £4.7bn of reallocated HS2 funding.

Prime Minister Rishi Sunak and Transport Secretary Mark Harper have confirmed Northern England will receive £2.5bn and the Midlands will receive £2.2bn from April 2025 to improve local transport connections.

In October last year, the government announced HS2’s link to Manchester was being scrapped with £36bn to be diverted into other transport projects across the country via the Network North transport plan. 

It also announced the North and Midlands would benefit from a new Local Transport Fund, with the breakdown of funding announced today (February 26).

Over a seven year funding period - as part of Network North – local authorities will receive on average “at least nine times more” than they 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.

Government says the investment 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.
• Improving journey times for car and bus users by tackling congestion.
• Increasing the number of EV charge points.
• Refurbishing bus and rail stations.

Advice for local councils and transport authorities will be published to help them develop 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.

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

Lord Patrick McLoughlin, chair of Transport for the North, said: “We welcome this funding for our local transport areas as a sign of progress towards transforming the north to a more inclusive, sustainable and better-connected region. 

“By having greater clarity on the funding that’s available, and consolidating funding streams, it helps remove inertia and accelerates delivery on the ground. 

“TfN look forward to working with government and local leaders, because we know that the travelling public will get better results the more locally the decisions are made on how those services should be provided.”

Maria Machancoses, chief executive of Midlands Connect, added: “This funding represents a significant investment in our region’s infrastructure. 

“The Midlands contributes more than £90bn to the UK economy, and to boost that even more, we need reliable transport networks and investment in new technology.  

“We welcome this announcement and the improvements it will bring for our communities and businesses across the Midlands, and we will continue to work with government and support our local authorities, to ensure these vital Network North transport upgrades are delivered.”