Fund to hand out £4.7bn from axed HS2 northern section to smaller projects

<span>HS2 high speed railway construction work in Wendover, Aylesbury, Buckinghamshire on 15 February 2024.</span><span>Photograph: Maureen McLean/Rex/Shutterstock</span>
HS2 high speed railway construction work in Wendover, Aylesbury, Buckinghamshire on 15 February 2024.Photograph: Maureen McLean/Rex/Shutterstock

About £4.7bn that would have been spent bringing HS2 to Manchester and Leeds is to be reallocated to transport projects in smaller towns and cities in the north of England and Midlands, ministers have said.

The money is specifically for communities that are outside city regions, in places such as Blackpool, Hull and Leicester, as well as counties including Staffordshire and Lincolnshire, which don’t have directly elected metro mayors.

Local leaders in these areas have long complained of getting a raw deal compared with city regions such as Greater Manchester, West Yorkshire and the West Midlands.

The Department for Transport said the allocations, which range from £49m for Rutland to £494m for Lancashire, can be spent on projects including: building new roads and improving junctions, filling potholes, improving street lights, increasing the number of electric car charging points, installing or expanding mass transit systems, refurbishing bus and rail stations and “improving our streets so they are safer to walk children to school and increasing accessibility for all”.

Related: Peaky Blinders creator calls HS2 ‘gamechanger’ for West Midlands

Called the “local transport fund”, the cash will be available from April 2025 to “give local authorities enough time to develop their funding plans and … ensure they are delivered as soon as possible”, the DfT said. It will run for seven years.

Rishi Sunak, who cancelled HS2’s northern leg while visiting Manchester for the Conservative party conference last year, said the new fund heralded a “new era of transport connectivity” that “will benefit more people, in more places, more quickly than HS2 ever would have done”.

The announcement is part of Sunak’s attempt to persuade voters in the north and Midlands that levelling up is still a government priority. He will host a cabinet meeting in Yorkshire on Monday to underline the point.

Labour dismissed the announcement, with the shadow transport secretary, Louise Haigh, saying: “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.”

She added: “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 DfT said councils will work with local MPs, as well as their communities, to develop their plans for the cash, saying: “This investment demonstrates our commitment to reinvest all of the £19.8bn from the northern leg of HS2 in the north and all of the £9.6bn from the Midlands leg in the Midlands, while the £6.5bn saved through the new approach at Euston will be spread across every other region in the country.”

The announcement was welcomed by the former Tory transport secretary, Patrick McLoughlin, chair of Transport for the North, which advises the government on the north of England’s transport needs. He said: “We know that the travelling public will get better results the more locally the decisions are made on how those services should be provided.”