In their last Espresso Shot episode for March 2024 David and Mike discuss how far Government’s £4.7bn announcement of transport investment for the North and Midlands mitigates cancellation of HS2 beyond Birmingham.
What has the UK Government actually announced?
On February 26th, the UK Government announced Local Transport Fund investment of £4.7bn, reallocated from HS2. This spans the seven years to 2032 for 26 local and one Combined Authority (York & North Yorkshire) in the smaller cities, towns and rural areas of the North and Midlands. This money can be used for everything from new roads and mass transit systems to potholes and street lighting. This is, in essence, the comparable non-metropolitan funding pot to the City Region Sustainable Transport Settlements (CRSTS) of around £19.5bn that had previously been announced for eight Mayoral Combined Authorities (seven of them in the North and Midlands).
Has the Local Transport Fund put the HS2 debate to bed indefinitely?
Possibly not.
Proposals are being developed by the Mayors of Greater Manchester and West Midlands with industry and investors to keep the HS2 concept north of Birmingham alive. Three alternative options are being considered – a lower speed new track, bypasses of key bottlenecks on the West Coast mainline, and more incidental improvements to the West Coast mainline. David and Mike discussed whether this presages a new balance between top down national and more bottom-up metro mayor determination of national transport infrastructure priorities. The Government’s evident inability to deliver major large scale infrastructure investment like HS2 certainly suggests the need for a new approach.
Indeed, the UK may well now have a general credibility problem in attracting institutional and market investment in this type of core transport infrastructure. Sadly, metro mayors are likely to be tarred with the same brushes of long term political commitment and uncertainty as Government itself.
Are the CRSTS and LTF approaches the best way forward given the national problems with major infrastructure investment?
There is no doubt that the amounts allocated are very large – around £2.8 bn per year for the eight CRSTS metro mayors and sometimes more than ten times current levels of LTF spending for the 26 local authorities in February’s announcement. This raises at least three major questions.
Firstly, there may be scale up capacity and capability challenges in local areas seeing such a major increase in transport investment for which they are directly responsible. Second, there are devil-in-the-detail uncertainties around Government expectations of local areas meeting as yet unpublished Department for Transport advice, the unspecified referenced role of MPs in endorsing LTF plans and programmes, and whether there is an expectation (as in CRSTS) of local counterpart match-funding (of 15-20%) and where this might come from. And thirdly, there are questions about how strategically these funds will be used given the transactional purposes they are also meant to address. Will eight CRSTS and 27 LTFs add up to a coherent whole for the North, Midlands and UK plc?
Concluding remarks
To reconfigure how transport investment in the North and Midlands will be done henceforth, on the back of a short term political necessity to compensate cities and regions who have lost out from the cancellation of HS2, is unlikely to end well. But we’d love to hear how CRSTS and LTF announcements are being delivered in your areas. What are your learning points about how they can be optimised for long term sustainable and inclusive growth and development? Is this going to be yet another agenda we shall have to revisit with a new government over the next 12-24 months?
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