UK Government Reallocates £4.7 Billion of HS2 Funding

The UK government has announced that local authorities in the North and the Midlands will receive 4.7 billion GBP in funding from April 2025 to improve transport connections.

With this investment, the North will receive 2.5 billion GBP and the Midlands will receive 2.2 billion GBP in funding to enhance transport services and infrastructure.

Meanwhile, 8.3 billion GBP is being invested in resurfacing roads across the country, while an additional 1 billion GBP will help improve bus services in the North and Midlands. 200 million GBP is also being invested to extend the 2 GBP bus fare cap across England. This funding is all sourced from reallocated HS2 funds.

Local leaders to receive £4.7 billion to transform transport across the North and Midlands
Local leaders to receive £4.7 billion to transform transport across the North and Midlands

As part of the government’s Network North plan, the newly-announced 4.7 billion GBP in reallocated HS2 funding is being invested through the Local Transport Fund.

This is the first transport budget of its kind, as it is specifically targeted at smaller cities, towns and rural areas. It also empowers local leaders to invest in the transport projects that matter most to the communities, rather than projects being selected by the government.

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 to 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.”

According to the Department for Transport (DfT), this investment will enable local authorities to invest in transport improvements such as:

  • Building new roads and improving junctions
  • Installing or expanding mass transit systems
  • Improving  journey times for cars and buses by reducing congestion
  • Increasing the number of EV chargepoints
  • Refurbishing bus and rail stations
  • Improving pedestrian access

This announcement follows the cancellation of HS2 Phase 2 in October 2023. Several organisations have since expressed disappointment that much of this funding will now be invested in road schemes, rather than public transport.

Ben Curtis from charity, Campaign for Better Transport said:

“Re-allocating HS2 money to other public transport projects is welcome, but we are disappointed to see funding transferred from a sustainable rail scheme to high carbon, low-return road schemes. Time and time again, research has proven that investing in public transport over road schemes delivers the greatest return for the taxpayer, whatever metric is used.”

Meanwhile, the Confederation of Passenger Transport (CPT) has also highlighted the need to ensure councils in the south of England likewise receive investment opportunities for valuable public transport services.

Graham Vidler, CEO of the Confederation of Passenger Transport said:

“Councils in the south of England now also need the same level of long-term investment in local transport, in particular in buses which are the UK’s most popular, affordable and accessible form of public transport. Frequent, fast, reliable buses are required by all people across the country to get to work, school, and to access essential services. This should not be a postcode lottery based on the cancelled HS2 route.”

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