The government has today (June 11) announced details of its spending review, including the budget allocated to the Department for Transport (DfT) and other departments up to 2028/29.

The review states that capital investment, excluding spending on High Speed 2 (HS2), will increase at an annual average real terms growth rate of 3.9% per year between 2025-26 and 2029-30.

However, DfT Departmental Expenditure Limits will decrease by five per cent a year over the next three years. The review attributes this to a declining rail passenger services subsidy as passenger ridership and revenue continue to recover post COVID-19, and efficiencies and savings are made through public ownership of rail services.

You can read the spending review here.

Rail projects:

• £3.5 billion to drive delivery of the TransPennine Route Upgrade, improving connectivity and reducing journey times between Manchester and Leeds, from 55 to 41 minutes. This is due to be delivered by the early 2030s;

• Continued delivery of East-West Rail with £2.5 billion investment to provide new connectivity and unlocking growth across the Oxford-Cambridge corridor;

• £300 million for rail investment in Wales, including for the Burns Review stations, North Wales Level Crossing, Padeswood Sidings and Cardiff West Junction. The review and the upcoming 10-year Infrastructure Strategy will recognise Wales’ long-term infrastructure needs and will deliver at least £445 million of rail enhancements to realise them;

• £240 million to enhance Leeds station, improving capacity and relieving congestion;

• Funding to progress this government’s long-term strategic rail ambitions, in the North of England, with further detail to be set out through the 10-year Infrastructure Strategy;

• Funding to progress the next stage of Midlands Rail Hub West, strengthening connections from Birmingham across the West Midlands and to other regions;

• £25.3 billion to progress delivery of HS2 from Birmingham Curzon Street to London Euston.

City Regions Funding:

• Providing £15.6 billion in total by 2031-32 for the elected mayors of some of England’s largest city regions via the Transport for City Regions (TCR) settlements, supporting them to invest in their local transport priorities, including zero emission buses, trams and local rail. This will more than double real terms city region transport spending per year by 2029-30, compared to 2024-25;

• Investing £2.3 billion in the Local Transport Grant over Phase 2 of the spending review for local transport improvements including bus lanes, cycleways and congestion improvement measures in places outside of those areas receiving TCR settlements. This will deliver a fourfold increase in funding in 2029-30 compared to 2024-25;

• Providing the largest multi-year settlement for London in over a decade, with £2.2 billion of funding between 2026-27 and 2029-30 for Transport for London’s capital renewals programme.

Buses:

• Providing around £750 million 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. The review also confirms an extension of the £3 bus fare cap – due to end this year – by over a year until March 2027, covering 5,000 bus routes and supporting with cost of living pressures.

Transport decarbonisation:

• £2.6 billion over phase 2 of the review to decarbonise transport, including investing £616 million to build and maintain walking and cycling infrastructure.