Outgoing prime minister Sir Keir Starmer has announced that the Department for Transport (DfT) will see £800m of funding cuts between now and 2030 to facilitate increased spending for the Defence Investment Plan (DIP).
With the defence plan seeing an additional £15bn spent across the same four-year period, the budget for the Ministry of Defence is expected to increase by £62.6bn by 2030. To achieve this, departments have been asked to contribute 1p in every £1 of their capital budgets from this year, with the Government committing to ensuring it will ‘focus this on finding efficiencies, cancelling or delaying lower priority programmes and remaining ruthlessly focussed on value for money for the taxpayer'.
However, it added: ‘As departments with larger capital budgets, the DfT and the Department for Energy Security and Net Zero (DESNZ) have been asked to make further contributions.'
These ‘further contributions' have been structured as follows:
- 2026-27: £100m
- 2027-28: £200m
- 2028-29: £200m
- 2029-30: £300m
In his speech announcing the new funding decisions, Sir Starmer said that ‘some capital projects, for example, on roads and energy, which are important but not immediately vital, will no longer go ahead as planned,' adding that these cancellations and budgetary cuts are about ‘taking the necessary choices, the right choices, to protect our nation'.
In a policy paper intended to explain the DIP and associated cuts, the Government stated that ‘DfT will provide savings of up to £700m from its roads funding' and is expected to ‘consult on reductions to the third Road Investment Strategy (RIS3) - including the potential cancellation of the A38 Derby Junctions and A46 Newark Bypass schemes, both of which are yet to enter contract and not as far along as other road schemes'. However, it added that ‘there will be stakeholder consultations before any final decision is taken'.
Strong responses
Robert Jenrick and Hamish Falconer, MPs for Newark and Lincoln, both voiced their anger at the decision to cut funding for road projects.
The Guardian reported that Mr Falconer said: 'I am disappointed by the uncertainty today about the A46 Newark bypass-widening scheme. I support further funding for the Dip, but the A46 upgrade programme is well advanced, long awaited, excellent value for money and of strategic importance to both Lincoln and the region.
'Following the Labour party leadership contest, I will be seeking an urgent meeting with the incoming prime minister, incoming chancellor and incoming secretary of state for transport to discuss this decision and explore whether there is a credible route forward for this vital project.'
Mr Jenrick told The Guardian: 'This makes a mockery of Andy Burnham's commitment to bring investment to all parts of the country. I have written to the transport secretary and demanded an urgent explanation for local residents. It is shameful that such a big decision has been snuck out by the government without any debate.
'I will keep campaigning to get spades in the ground as soon as possible so we can finally deliver this crucial project.'
Claire Ward, Mayor of the West Midlands, also shared her displeasure at the decision: 'I was informed of this decision as the prime minister was delivering his speech on the defence investment plan," she said. "If mayors and their regions are to be seen as respected partners of government, we need to be treated like grownups and involved in trade-offs which affect our regions.
'The trade-offs here are ones I understand. I understand that increasing investment into defence means removing it from other things. I understand that everywhere will need to contribute so that we can be safe in a less certain world.
'What I cannot understand is why the only region being asked to lose £900m of investment into its roads is the East Midlands – that is not equitable and fails to recognise the decades of underinvestment that have preceded today's decision.'
The department is also expected to explore ‘limited reductions to as yet uncommitted roads funding'.
Despite this, it added: ‘The government remains committed to protecting funding for local authorities to mend potholes and repair their roads, protecting investment in rail infrastructure, including Northern Powerhouse Rail, and the proposals will not impact bus or rail services.'
David Giles, chair of the Asphalt Industry Alliance (AIA), commented: ‘It is disappointing that capital funding for new road projects looks set to be cut, but it is vital that the Government honours the pledge made today to protect funding for local authorities to carry out much needed road maintenance and pothole repairs.
‘We understand that in an increasingly challenging world tough public funding decisions must be made. However, local roads in England and Wales are already in a woeful condition and face a backlog of repairs that now stands at a whopping £18.62 billion.
‘All services depend on our local roads. That's why the Government must ensure that its £7.3 billion commitment to 2030 to support repairs and prevent further decline is fully delivered and is not diverted elsewhere.'
