PM sets out £4.7bn ‘local transport fund’ plans for ‘redirected’ HS2 funds

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Rishi Sunak has said that funds for the axed HS2 section will be ‘reallocated’ as transport funding to be shared across regional councils as he holds a Cabinet meeting in Yorkshire and the Humber.

The North of England will be allocated £2.5 billion and the Midlands will receive £2.2 billion from money previously intended for the axed northern leg of HS2, the Prime Minister has said.

The Government said the money will go into a “local transport fund” targeted at smaller cities, towns and rural areas, and councils and unitary authorities will decide how best to spend it.

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However, the funding will not be made available until April 2025, after the general election expected later this year.

At the Conservative party’s annual conference in Manchester last year, Sunak confirmed that plans for the high-speed rail project north of Birmingham would be scrapped amid spiralling costs.

The Prime Minister promised to reinvest “every single penny” of £36 billion previously earmarked for the scheme into hundreds of new transport projects.

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At Cabinet on Monday, Mr Sunak is expected to say that ministers and MPs should “hold local authorities to account” to ensure the local transport fund is “used appropriately”, Downing Street said.

The Transport Secretary is also expected to update ministerial colleagues on the delivery of Network North – the Government’s overarching plan to replace HS2’s northern leg.

The Government says the new funding allocations will provide local authorities with long-term certainty over the amount they have to spend on transport services their communities need the most, such as expanding mass transit systems, filling potholes, roadbuilding or refurbishing bus and rail stations.

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The PM and ministers will also meet with communities, businesses and organisations to discuss their priorities for the fund and how their area can best benefit from the money.

Mr 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.

“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.”

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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.”

Greater Manchester Labour Mayor Andy Burnham posted on X: “Didn’t they promise this exactly 10 years ago? They must think we are thick.”

Shadow transport secretary Louise Haigh said: “The Tories have failed and local people are sick and tired of this Government taking them for fools.

“Only the Conservatives could have the brass neck to promise yet another ‘transformation’ of transport infrastructure in the Midlands and North after 14 years of countless broken promises to do just that.

“The Conservative record speaks for itself – record delays and cancellations on the rail network, 22 million more potholes and a record-breaking collapse in bus routes.

“Labour will reform our broken public transport system giving every community the power to demand London-style services, by taking back control over buses and bring our railways back into public ownership as contracts expire. And we will work with mayors and local leaders to deliver a credible and transformative programme of rail and transport infrastructure investment.”


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