£1.5 billion HS2 funding to be reallocated to North West leaders from 2025

Nearly £1.5 billion of reallocated HS2 funding is to be invested directly into the North West through the government’s Local Transport Fund to improve local transport connections.

Local authorities throughout the region will receive a share of £1.48 billion to directly invest into projects to improve transport infrastructure in their communities, Prime Minister Rishi Sunak and Transport Secretary Mark Harper have confirmed. Local councils will be expected to publish their delivery plans for which projects they wish to invest in, with electric vehicle infrastructure, walking and cycling schemes, bus and local rail improvements, and the filling-in of potholes all able to be supported by the funding.

The funding, set to be delivered from 2025 to 2032, comes on top of Greater Manchester also securing an enhanced settlement for its transport spending, totalling £2.4 billion through to 2028, in light of the cancellation of HS2 beyond Birmingham.

Prime Minister Rishi Sunak said:

“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.”

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.”

Local leaders in the region have criticised the announcement given previous promises by the government to invest in infrastructure in the region. Speaking on the BBC on Sunday 25th February, Greater Manchester Mayor told Laura Kuenssberg:

“It was 2014 when George Osborne came to Manchester and said there would be a Northern Powerhouse, HS2 would be at the heart of it. So they’ve renamed it this morning – engine of the North, I think it’s called now. But honestly, would anybody in the North of England look at this and not think, they’re just taking us for mugs? They just keep promising this stuff. It’s just not going to work.”

Henri Murison, chief executive of the Northern Powerhouse Partnership, meanwhile told BBC North West Tonight the government was “recycling money” from a cancelled project and was not excited by proposals.

Plans to reallocated savings from the cancellation of HS2 into smaller scale projects, dubbed Network North, were first announced at the Conservative Party Conference in Autumn 2023, which included significant extra funding for local authorities nationwide for improvements to road conditions, rail, bus and tram connections. Network North plans, however, immediately attracted criticism for diverting funds away from areas set to benefit from HS2’s Northern leg, to communities across Southern England, including in North London and Cornwall.