Updated 13.32, 13.44, 14.00, 14.05, 14.09

Chancellor Rachel Reeves has announced a four-year funding settlement for Transport for London as part of her Spending Review. There will be £2.2 billion between 2026-27 and 2029-30 for Transport for London's capital renewals programme.

£25.3 billion is included in her transport budgets to continue construction of HS2 from Birmingham Curzon Street to London Euston.

She says a quarter of the Transpennine Route will have been electrified this year, and that funding of £3.5 billion will be available. She also promised to ‘take forward’ work on Northern Powerhouse Rail in the coming weeks.

There will be a further £2.5 billion for East West Rail, to ‘unlock the potential’ of the Oxford-Cambridge corridor.

There will also be funding for Midlands Rail Hub West, and £445 million will be invested in Welsh railways, including upgrades at Cardiff Central.

The rail projects in this Spending Review are in addition to £15.6 billion already announced for local transport in the city regions which were revealed on 4 June, plus £2.3 billion for transport improvements in other counties outside London, including bus lanes, cycleways and congestion measures.

Reactions have been coming in.

London Transport Commissioner Andy Lord said: ‘We are grateful that the Government has agreed a much-needed multi-year capital funding agreement similar to those in place with Network Rail and National Highways.

‘This settlement will ensure that London’s transport network can continue to support new homes, jobs and economic growth in the capital. And it will boost jobs, skills, growth and opportunities across the UK. It will allow us to deliver a programme of sustainable investment, aligning our suppliers around a longer-term programme. And it will mean that we can complete the introduction of new trains on the Piccadilly line and DLR and new signalling on 40 per cent of the Tube, can procure a new tram fleet, progress discussions on new Bakerloo line trains and can get to work on renewing some of London’s critical roads, tunnels and flyovers.

‘Our supply chain supports growth and opportunities right across the UK, with around two thirds of our suppliers based outside London, and nearly a third of our overall spend and resulting economic benefit felt outside of our city. We are pleased that, together with our suppliers, we can move on from the short-term and stop-start nature of funding over recent years.’

Railway Industry Association chief executive Darren Caplan said: ‘The Railway Industry Association welcomes the support Chancellor Rachel Reeves announced for UK rail in the Spending Review, and the recognition that the railways are key to delivering economic growth.

‘This support includes the next phases of the Transpennine Route Upgrade, East West Rail, and Northern Powerhouse Rail, as well as new funding for the Midlands Rail Hub and for Welsh rail infrastructure.

‘The Treasury's plans to reassess the Treasury’s Green Book investment framework should also be applauded, as social, environmental and regional value are all central to what rail delivers.

‘This Spending Review follows the announcement last week of £15 billion of funding for local transport in city regions, including metro and tram networks, whether the Midlands, Sheffield, Greater Manchester, Yorkshire, Tees Valley, Newcastle, or West of England. Rail businesses from every part of the UK will want to be involved with delivering those schemes, as the Government and devolved bodies take them forward.

‘Finally, we also welcome the Chancellor’s focus on skills and training as well as her ambition to leverage private investment into transport to help alleviate capacity and connectivity constraints. We look forward to more details on how this will be delivered, when the Government’s Infrastructure and Industrial strategies are published later in June.’

AECOM’s chief executive for Europe and India Richard Whitehead said: ‘This long-term funding cements the government’s pledge to accelerate the delivery of essential infrastructure and, in turn, unlock growth opportunities across the UK.

‘The additional capital expenditure on infrastructure – including nationally significant schemes such as East West Rail – is welcome, along with the £15.6 billion for city region local transport projects. This should promote more balanced regional development and ensure strategic investments benefit all parts of the country, driving growth and innovation.’

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