National Highways and English local roads authorities have secured a long-term capital funding settlement of £24bn between 2026-27 and 2029-30, the chancellor announced in her Spending Review.
This is equivalent to £6bn per fiscal year, with £4.8bn already having been allocated to National Highways for this financial year.
Treasury officials said: 'This funding increase will allow National Highways and local authorities to invest in significantly improving the long-term condition of England’s road network, delivering faster, safer and more reliable journeys.'
RAC head of policy Simon Williams said: 'This is excellent news. Local authorities now have a golden opportunity to end the cycle of merely filling potholes and instead begin to be much more proactive in their maintenance.
'This must include both more surface dressing to keep decent roads in good condition and resurfacing those that are at the end of their lives. It’s incumbent on councils to grasp this new opportunity and show all road users how it’s making a genuine difference in the quality of the roads they use every day.'
Labour also announced £2.3bn for the Local Transport Grant over the Spending Review Phase 2 (2026-2030) for local transport improvements including bus lanes, cycleways and congestion improvement measures in places outside of those areas receiving TCR settlements.
This will deliver around a four-fold increase in funding in 2029-30 compared with 2024-25, the Treasury said.
There is also £616m over Phase 2 to build and maintain walking and cycling infrastructure.
The UK's largest transport authority, Transport for London, has secured its biggest multi-year settlement in over a decade, with £2bn of funding between 2026-27 and 2029-30 for its capital renewals programme'.
Ministers also pledged to explore options for the Docklands Light Railway (DLR) Thamesmead extension.
The announcement of multi-year spending settlements will be warmly welcomed across the roads sector, as will Ms Reeves emphasis on local and regional transport and infrastructure.
However, there may be a sting in the tail, not least for DfT, as the department and authorities look set to swap revenue for capital spending.
The DfT has committed to delivering at least 5% savings and efficiencies, Whitehall officials said, as the department becomes 'smaller, more skilled, and more agile'.
This includes savings identified 'through reform, modernisation and use of AI in DfT’s executive agencies'.
The department has also worked with the OVfM to identify £663m of technical efficiencies by 2028-29 and the transfer of rail services into public ownership over the coming years 'will enable the removal of duplication of functions currently spread across 14 Operators'.
HS2
The Government has allocated £25.3bn to progress delivery of HS2 from Birmingham Curzon Street to London Euston. This funding will support the 'full reset of the HS2 programme' Labour said under its new leadership.
Local and regional
- Confirmed: £15.6bn in total by 2031-32 for the elected Mayors via the Transport for City Regions (TCR) settlements.This means city-region transport spending will more than double in 2029-30 compared with 2024-25, in real terms.
Buses
- Provided: around £750m per year to maintain and improve bus services, including taking forward franchising pilots in areas including York and North Yorkshire and Cheshire West and Cheshire West and Chester;
- Extended: The £3 bus fare cap – due to end this year – will run until March 2027, covering 5,000 bus routes and supporting with cost of living pressures.
Rail
- Allocated: £3.5bn to drive delivery of the TransPennine Route Upgrade, improving connectivity and reducing journey times between Manchester and Leeds, from 55 to 41 minutes. This will be delivered by the early 2030s.
- Pledged: Continued delivery of East-West Rail with £2.5bn investment to provide new connectivity and unlocking growth across the Oxford-Cambridge corridor;
- Allocated: £300m for rail investment in Wales, including for the Burns Review stations, North Wales Level Crossing, Padeswood Sidings and Cardiff West Junction.
