Just one area of the North East will get a share of the latest £4.7 billion pot of funding being redirected from the scrapped northern leg of HS2.
The Government announced details on Monday of a “local transport fund” for smaller cities, towns, and rural areas around the North and Midlands. Almost £73 million being given to County Durham is the sole reallocation coming to the North East from that kitty.
That is because the remainder of the region is already due to receive money separately from the already-announced City Region Sustainable Transport Settlement (CRSTS), which will be awarded to the incoming North East mayor and has already been embroiled in major controversy. It is not yet known what Durham projects will benefit from the funding, which one Conservative MP called a “significant milestone in our journey towards building a more connected, prosperous future for County Durham”.
Paul Howell, the MP for Sedgefield, said: “The infusion of capital funding into County Durham reflects our dedication to empowering local and combined authorities to spearhead transformative projects tailored to their unique priorities. This announcement is a testament to our ongoing efforts to channel HS2 savings into tangible improvements that benefit communities nationwide.”
Coun Amanda Hopgood, Lib Dem leader of Durham Council’s coalition administration, said she was “delighted” with the allocation and that it would “support our work to improve the transport network, helping us to increase travel options and connect local people with opportunities across the region”.
Durham was a late joiner to the new North East devolution deal, signing up in late 2022 shortly before the multi-billion agreement was struck with the Government. That eleventh-hour arrival meant the county was excluded from a reported £147 million of extra CRSTS money already earmarked for the other six areas involved – Newcastle, Gateshead, Northumberland, North Tyneside, South Tyneside, and Sunderland.
This new £72.8 million allocation is intended to make up for that gap and runs from 2025 to 2027, after which Durham will be part of a phase two CRSTS settlement of £1.8 billion for the entire North East Mayoral Combined Authority area. The second round of CRSTS money was announced in October as Rishi Sunak confirmed the Birmingham to Manchester section of HS2 would not be built.
It became the subject of controversy in the North East, after the Government was accused of a rapid U-turn on a pledge to pay for the reopening of the mothballed Leamside railway line –saying instead the mayor’s funding settlement “could part fund” its restoration, just 24 hours after the initial promise was made. Labour mayoral candidate Kim McGuinness had previously called for the North East devolution deal to be renegotiated to reverse what she alleged was a “snub” for Durham on transport funding.
She said on Monday that she was “glad the Government has listened to our demands and effectively renegotiated this transport fund”, however added: “But we need to be cautious when we see this Government bearing gifts. They scrapped a multi-billion pound new railway which would have freed up capacity on the East Coast, then they re-announced a few projects at a fraction of the cost.”
Election rival Jamie Driscoll, the sitting independent North of Tyne mayor, accused Ms McGuinness in January of “outright deception” on the issue – blaming Durham Labour councillors who campaigned vociferously against joining the devolution deal for the county’s initial exclusion from the transport funding pot. He called the latest announcement “obviously good news”, adding: “County Durham will now get the same benefits from the new devolution deal as the rest of the North East.”
The Prime Minister insisted that the decision to funnel HS2 money into other local transport schemes would be “transformational”. But Northern Powerhouse Partnership chief executive Henri Murison, a former Newcastle councillor, said Monday’s proclamation was simply a announcement.
He told BBC Radio 4’s Today programme: “I’m still kind of happy to receive this money in place of nothing but it is also coming alongside the fact that many of these same communities will not benefit from HS2 and we still haven’t got enough clarity on Northern Powerhouse Rail, which is still a very important and fundamental part of the North transport system.”
Martin Gannon, the Labour leader of Gateshead Council and chair of the North East Joint Transport Committee, said: “Today’s Local Transport Fund announcement is welcome and will provide more funding for the region, specifically for local transport schemes in County Durham from 2025/26 to 2026/27. We will look closely at the finer detail in due course but understand that the new combined authority will receive around £72.8m in additional funding on top of our existing CRSTS allocation.”
