Sunak sets out £4.7bn ‘local transport fund’ redirected from HS2’s axed northern leg

The North and Midlands will receive £4.7 billion to spend on transport infrastructure after the government cancelled the HS2 rail line north of Birmingham, ITV News Correspondent Amy Welch reports

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 made available after the northern leg of the flagship levelling-up project was axed.

Transport Secretary Mark Harper defended the government's decision on HS2: "Rather than spending a third of the government's transport budget on a single railway line, we decided to stop doing that and spend it instead on transport projects across the country".

The government has said the money 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.

However, Labour ridiculed what it described as the government's “back of a fag packet plan” and said communities in the Midlands and North are “sick and tired” of empty promises.

Labour's Party Chair Anneliese Dodds said "the reality is many of the schemes being talked about have already been announced... This is ultimately spending money that was previously earmarked for something else, that was then cancelled after many years of mismanagement of HS2".

The meeting in the North of England 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 change – Mr Sunak confirmed after months of speculation that plans for the flagship levelling-up 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 funding.

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Mr Sunak said: "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 in 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.”

Transport Secretary Mark Harper described the investment as "game-changing" for the North and the Midlands.

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

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

“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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