£4.7bn ‘local transport fund’ redirected from axed HS2 plans announced

Rishi Sunak has set out how transport funding redirected from the Government’s abandoned HS2 plans will 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 earmarked for the axed northern leg of the flagship levelling-up project.

The funding will not be made available until April 2025 – months after the next general election expected later this year.

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

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Labour accused ministers of having the “brass neck” to speak about “transformation” to regional transport services after “countless broken promises to do just that.”

The visit to Yorkshire and the Humber will be the first time Mr Sunak has held a regional Cabinet outside of conference season since he took office in 2022.

The last time ministers gathered outside of London was for emergency talks ahead of the PM’s announcement that HS2 would be scaled back at last year’s meeting of Tory delegates.

At the party’s annual conference in Manchester – the city most directly hit by the U-turn – Mr Sunak confirmed after months of speculation 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.

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, for example expanding mass transit systems, filling potholes, roadbuilding or refurbishing bus and rail stations.

The PM and ministers are also to 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.”

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 said in a post on X: “Didn’t they promise this exactly 10 years ago? They must think we are thick.”

Labour ridiculed what it described as a “back of a fag packet plan” and said communities are “sick and tired” of empty promises.

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.”