Transport across North West to be transformed with new £1.5 billion investment

Millions of people in the North West - from Cheshire East and Lancashire to Cumberland and Blackpool - will benefit from better public transport, reduced congestion and upgraded bus and train stations as the Government continues to reallocate funding from HS2 to revolutionise transport, drive economic growth and transform communities. 

Today (Monday 26 February), Prime Minister Rishi Sunak and Transport Secretary Mark Harper have confirmed that the North West will receive a £1.48 billion boost from April 2025 through the Local Transport Fund to improve the transport connections that so many people rely on every day across smaller cities, towns, and rural areas. 

The new investment - announced as part of Network North - will deliver an unprecedented long term funding uplift across the region over seven years. It’s the first transport fund of its kind targeted at smaller cities, towns, and rural areas, which empowers local communities and local leaders to invest in the transport projects that matter most to their areas.

Over the 7 years as a whole this funding will be on average at least nine times more than these local authorities currently receive through the local integrated transport block which is the current mechanism for funding local transport improvements in their areas.

At Cabinet today, the Prime Minister is expected to call on Ministers and MPs to hold local authorities to account to ensure the funding is used appropriately and that the voices of local communities are heard when decisions are made on where this funding goes and how this funding is spent. 

This funding prioritises the forms of transport that matter most to people and will deliver for future generations – driving jobs, growing the economy, and levelling up the country.

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 nearly £1.5 billion directly back into smaller cities, towns, and rural areas across the North West, but we are also empowering their local leaders to invest in the transport projects that matters most to them - 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 pounds of funding we’ve already invested into our roads, buses and local transport services across the country.” 

The funding will be made available from 2025 to give local authorities enough time to develop their funding plans and prepare to hit the ground running to start delivering them as early as possible. 

This 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 for personal safety  
• Improving journey times for car and bus users by tackling congestion 
• Increasing the number of EV chargepoints 
• Refurbishing bus and rail stations 
• Improving our streets so they are safer to walk children to school and increasing accessibility for all. 

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.

To ensure local authorities can make the most of this unprecedented funding, the Department will publish advice for local councils and transport authorities to help them develop ambitious plans to improve local transport infrastructure in their areas. 

Today’s new funding comes as devolution deals now cover nearly 34 million people, or 60% of the English population, including the recent deal for Lancashire – up from 41% since the major levelling up plan two years ago, as the Government delivers on its plan to level up the country putting power back into the hands of local communities.

Transport Secretary Mark Harper said: 

“Today’s £1.48 billion investment is truly game-changing for the smaller cities, towns, and rural communities across the North West, 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.  

“This new funding boost will make a real difference to millions of people in the North West, empowering local authorities to drive economic growth, transform communities, and improve the daily transport connections that people rely on for years to come.” 

Today’s funding is directed to the North and Midlands because the majority of HS2 savings are from those regions. The Local Transport Fund is specifically designed for communities in the North and Midlands outside City Regions - who already receive City Region Sustainable Transport Settlements (CRSTS) – allowing them to deliver similar transport infrastructure upgrades in their local communities. 

Metro Mayors in Greater Manchester and the Liverpool City Region will benefit from more than £1.7 billion of CRSTS funding from now until 2027 and have been allocated an additional £4 billion from 2027 until 2032 to improve transport across the region, funded in part from reallocated HS2 funding. 

This investment demonstrates our commitment to reinvest all of the £19.8 billion from the Northern leg of HS2 in the North and all of the £9.6 billion from the Midlands leg in the Midlands, while the £6.5 billion saved through the new approach at Euston will be spread across every other region in the country.

 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.” 

The Government’s plan to transform British transport is already delivering for people. Today’s announcement follows £1.2 billion to resurface hundreds of miles of local roads in the North West, with the first tranche of funding already being delivered, right from this financial year.  

We’ve committed £12 billion towards better connecting Manchester to Liverpool. This would allow the delivery of Northern Powerhouse Rail as previously planned, including high-speed lines. But we will work with local leaders to agree whether they wish to suggest other ways to achieve the objectives with that £12 billion. 

We’ve also invested over £200 million to extend the £2 bus fare cap in England outside London until the end of 2024 and will spend £1 billion to improve bus services in the North and the Midlands, with £150 million delivered from April this year. Since the £2 bus fare cap was introduced across England on 1 January 2023, millions of passengers have benefited from lower fares.  

Taken together, these investments are all part of the government’s plan to build a brighter future for generations to come by levelling up transport infrastructure across the country. 

Contact Information

Esther Uthayakumar
esther.uthayakumar@dft.gov.uk

Notes to editors

• Today’s funding follows the launch of the first measures from the Government’s Plan for Drivers with new measures to tackle congestion from street works which may help generate up to an extra £100 million for local councils to resurface roads and tackle potholes.  
• The government values the important contribution councils make and has conducted an extensive engagement and listening programme with councils to understand the pressures they are facing.  
• That’s why we recently announced additional funding for local authorities in England through the latest local government finance settlement for 2024-25 which makes available up to £4.5 billion more for councils in England in 2024-25 – with £64.7 billion for local government overall. The package includes the £600 million in extra support to bolster council budgets, including £500 million for social care, announced on 24 January. 
• The nine times calculation has been made by comparing the Local Transport Fund to the Integrated Transport Block: Highways maintenance and ITB funding formula allocations, 2022 to 2025 (3 years) - GOV.UK (www.gov.uk)  
• If you take the allocations for the Local Transport Fund and divide it by seven (for each year this funding will be delivered) then compare it to their existing Integrated Transport Block funding, it comes to at least nine times more funding than their existing Transport Block allocations.
• The Integrated Transport Block is a capital grant currently paid by the Westminster Government to local authorities where they have full control over how to spend it, and is therefore the only directly comparable transport fund.
• Local authorities also benefit from additional transport funding, including the £8.3bn roads resurfacing fund and bus service improvement plan funding which isn’t taken into account in this calculation. 
• The specific year by year funding settlements for the Local Transport Fund will be set out in due course. 
• The full breakdown of allocations for the North West can be found below: 

* Numbers may not sum to totals due to rounding.