UK (Parliament Politics Magazine) – Labour has frozen council transport funding ahead of Chancellor Rachel Reeves’s Budget, delaying allocations as the government prepares its new spending plan.
As reported by The Telegraph, Labour paused council transport funds ahead of Rachel Reeves’s Budget.
What did DfT figures reveal about council transport funding?
The Department for Transport said Tuesday that every English local authority will face a freeze in its Local Transport Grant next year.
It follows concerns that the Chancellor will raise taxes in October’s Budget to tackle a £50bn shortfall.
The Local Government Association urged ministers to raise council funding with extra taxpayer support. The freeze on local transport budgets indicates Labour may retreat from its earlier commitments to expand public sector spending.
After taking power last year, Ms Reeves set out an £87bn expansion of public spending to be delivered over the next two years.
The measure revealed Tuesday means nearly two-thirds of English councils will see Local Transport Grant allocations held flat for the next four years.
Officials insisted LTG allocations are “rolled over,” not frozen, though 40 of 60 local transport authorities will see zero increase through 2029. Under the DfT scheme, 21 councils will receive extra funding, held back until 2027.
Labour-run councils and those with no overall control will be the main beneficiaries of LTG funding. Reform-controlled Lancashire and Greater Lincolnshire receive the largest individual allocations.
The government handed LTG funds to councils, including local, county, and combined authorities.
How is Labour directing LTG funds to councils and why?
A government insider said most councils in the North and Midlands are receiving higher grant allocations. These regions have the greatest need for public funding.
The funds will be used for public transport upgrades, including new zero-emission buses and enhanced accessibility. They will also target congestion reduction and improved safety for pedestrians and cyclists. The allocation is based on population density, giving more funding to areas with larger populations.
The funding is provided in addition to other government-backed transport spending, including the Integrated Transport Block and highways grants.
Labour pledged £1.6bn for pothole repairs in 2025 at the end of last year. The LTG was introduced by Labour in March, replacing Tory funding plans ahead of the 2024 election.
The original plans were set to run until 2032. However, the LTG deal now only extends to 2029, the expected year of the next election.