In this article, I will highlight key details from the UK Government’s HM Treasury Spending Review 2025, with a particular focus on public transport. While the broader review includes major commitments to the National Health Service (NHS), this piece will concentrate on the financial commitments and policy direction for transport infrastructure.
Press Release Excerpt by the HM Treasury:
Growth
Roads, infrastructure and towns outside of London and the South East will receive investment to ensure Britain’s renewal is one that is truly national. Revisions to the Treasury’s Green Book announced by the Chancellor mark a new approach to appraisal in the public sector, one which will enable the more effective assessment of place-based interventions.
The Chancellor announced £15.6 billion funding in total by 2031-32 for local transport projects in England’s city regions and £2.3 billion from 2026-27 to 2029-30 for local transport improvements outside of these nine regions, improving everyday journeys for all. The Chancellor announced a further £2.5 billion to connect Oxford and Cambridge through the continued delivery of East-West Rail and confirmed she will set out plans to take forward work on Northern Powerhouse Rail in the coming weeks.
Funding announced today will deliver upgrades to Cardiff Central station, reduce journey times between Manchester and Leeds through continued investment in the TransPennine Route Upgrade, and progress the delivery of Midlands Rail Hub, enhancing connections from Birmingham across the West Midlands and to other regions.
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The policy paper for the Spending Review 2025 includes a section on public transport:
Infrastructure
At this SR, the government is investing in economic and social infrastructure to drive growth, facilitate better public services, boost digital connectivity, upgrade the country’s transport network, secure its energy system and improve people’s lives in every part of the UK.
The government will publish its 10-Year Infrastructure Strategy later in June. This will set out a long-term plan for how infrastructure projects are planned and delivered. The strategy will set out a new approach to infrastructure, providing certainty and stability to industry, reforming institutions and removing barriers to delivery.
Transport
Transport is critical to the delivery of the growth mission. Over Phase 2 of the SR, the government will increase transport capital investment to give people across the country greater access to jobs, education, training and public services.
The government is investing in transport in city regions across England, pivoting new investment towards the country’s cities and surrounding towns and addressing historic underinvestment in the North and Midlands, while giving local areas more control over how this investment is spent. This includes:
• 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 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; and,
• 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.
Furthermore, through this SR, the government will fund key, growth-driving major projects that will improve connectivity between cities and towns, including:
• The Transpennine Route Upgrade, for which the government will provide £3.5 billion. This will reduce the journey time for commuters travelling between Manchester and Leeds by a quarter; and,
• Allocating £2.5 billion to progress the delivery of East West Rail, supporting housing developments and unlocking the potential of the Oxford to Cambridge Growth Corridor.
Department for Transport (DfT)
The Department for Transport (DfT) settlement provides total DEL funding of £31.5 billion in 2028‑29. Capital investment, excluding spending on High Speed 2 (HS2), increases at an annual average real terms growth rate of 3.9% per year between 2025-26 and 2029-30. Resource DEL funding falls in real terms over the period, primarily driven by 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.
This settlement will deliver increased local transport investment in England’s towns and cities, prioritising funding in the North and Midlands and giving local areas more control over how this money is spent. This includes:
• £15.6 billion in total by 2031-32 for the elected Mayors of some of our 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 means city-region transport spending will more than double in 2029-30 compared with 2024-25, in real terms. Over Phase 2 (2026‑27 to 2029-30), the total investment in England’s city regions is £9 billion;
• £2.3 billion for the Local Transport Grant over Phase 2 for local transport improvements including bus lanes, cycleways and congestion improvement measures in places outside of those areas receiving TCR settlements. This will deliver around a four-fold increase in funding in 2029-30 compared with 2024‑25; and
• Providing the largest multi-year settlement for London in over a decade, with £2 billion of funding between 2026‑27 and 2029-30 for Transport for London’s (TfL) capital renewals programme. The government also recognises the potential growth and housing benefits of the Docklands Light Railway (DLR) Thamesmead extension and is committed to working with TfL to explore options for delivery.
The government will deliver notable improvements to people’s everyday travel, improving commutes, school drop-offs and journeys into town, by:
• Providing £24 billion of capital funding between 2026‑27 and 2029‑30 to maintain and improve motorways and local roads across the country. This funding increase will allow National Highways and local authorities to invest in significantly improving the long-term condition of England’s road network, delivering faster, safer and more reliable journeys;
• 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; and
• This includes extending 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.
The government will invest in the critical national infrastructure needed to connect this country‘s cities and towns. The settlement will provide £10.2 billion for rail enhancements (excluding HS2) over Phase 2, including:
• £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 will 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. This SR 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; and
• 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 is provided under this settlement to progress delivery of HS2 from Birmingham Curzon Street to London Euston. This funding will support the full reset of the HS2 programme under the leadership of the new Chief Executive, addressing longstanding delivery challenges.
As part of the government’s Clean Energy mission, this settlement commits £2.6 billion over Phase 2 to decarbonise transport, including:
• £1.4 billion to support continued uptake of electric vehicles, including vans and heavy goods vehicles (HGVs);
• £400 million for the further rollout of charging infrastructure, building on the almost 80,000 public charging devices already available;[footnote 34]
• Extending the Advanced Fuels Fund to 2029-30 to support the production of sustainable aviation fuel; and
• Investing £616 million to build and maintain walking and cycling infrastructure.
DfT has committed to delivering at least 5% savings and efficiencies. This includes savings identified through the ZBR such as reform, modernisation and use of AI in DfT’s executive agencies. The department has also worked with the OVfM to identify £663 million of technical efficiencies by 2028‑29. These efficiencies will be delivered through a combination of changes such as:
• DfT becoming a smaller, more skilled, and more agile department;
• The transfer of rail services into public ownership over the coming years which will enable the removal of duplication of functions currently spread across 14 Operators, and create economies of scale; and
• Increased use of AI initiatives to increase automation in the Driving and Vehicle Licensing Authority (DVLA) processes.
Link to the full spending review.
The following is Transport for London’s (TfL) press release in response to the Spending Review settlement:
Andy Lord, London’s Transport Commissioner, 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 and get on with the vital work of making our city and our country work for everyone.
"The prevailing macro-economic conditions and other factors mean that we will continue to have to make at times difficult decisions and we will need to continue to carefully prioritise investment and control our costs. We will now work through the detail of the agreement before re-setting our business plan for the years ahead."
The settlement announced today sets out £2.2bn in capital funding for TfL over four years.
TfL is one of the only transport authorities in the world that can cover its own day-to-day operating costs - which will continue under this settlement - as well as the majority of a more than £2.1bn annual capital investment programme. But Government capital investment support is vital to ensure that the capital’s transport network can continue to be modernised and can support the city and the country’s economic growth.
London’s annual net contribution to the national exchequer is at a record £43.6bn, so supporting growth in London is critical to delivering the national growth mission.
At the same time, TfL has continued to make the organisation more efficient – with £1.5bn of savings being delivered since 2016.
The most recent analysis confirms TfL’s long-standing role in being a national engine of growth and demonstrates how powerful and economically important TfL’s supply chain is.
Across the previous two years, TfL spent over £12 billion with more than 3,000 UK suppliers. This has supported over £11 billion in total Gross Value Added. Nearly a third of TfL’s supply chain activity and economic benefit fell outside of London. TfL spend supported 100,000 full time jobs each year.
Here is the Mayor of London’s response, as issued in the Greater London Authority’s press release:
The Mayor of London, Sadiq Khan, said: “I've been determined to stand up for London and it’s good news that we have won extra resources for transport and housing. I have been campaigning for years for a multi-year deal for City Hall and for Transport for London and I welcome this agreement.
“However, I remain concerned that this Spending Review could result in insufficient funding for the Met and fewer police officers. It’s also disappointing that there is no commitment today from the Treasury to invest in the new infrastructure London needs. Projects such as extending the Docklands Light Railway not only deliver economic growth across the country, but also tens of thousands of new affordable homes and jobs for Londoners. Unless the government invests in infrastructure like this in our capital, we will not be able to build the numbers of new affordable homes Londoners need.
“As Mayor, I’ll continue to make the case to the government that we must work together for the benefit of our capital and the whole country. The way to level up other regions will never be to level down London. I’ll continue to fight for the investment we need so that we can continue building a fairer, safer and greener London for everyone.”
London TravelWatch statement following today’s Spending Review (11 June):
The four-year funding settlement for Transport for London in the Chancellor’s Spending review today is a welcome step forward in giving greater stability to TfL’s finances and allowing current projects, such as the introduction of new trains on the Piccadilly line and DLR, to be completed.
But the lack of extra funding for key projects such as the DLR and Bakerloo line extensions and the West London Orbital rail link is disappointing – and it is unclear whether the £2.2billion allocated will be enough to enable TfL to make good past under-investment in maintaining and renewing the existing network.
We look forward to seeing further details in the coming weeks.
As public transport is part of the Critical National Infrastructure, it is vital to ensure adequate funding, including for the renewal of infrastructure such as new rolling stock for the London Underground’s Bakerloo and Piccadilly lines, and for updated signalling systems. Failure to renew ageing assets leads to higher long-term costs, increased risk of breakdowns and incidents, and greater disruption for passengers.
My suggestions to improve public transport in London and beyond, with links to previous articles:
• Emphasise step-free access and accessibility for wheelchair users and those with mobility impairments
• Improve training for station staff and non-railway personnel to assist wheelchair users, including deploying ramps
• Address lack of step-free access and lift failures urgently, with standby lift engineers and alternative accessible taxis
• Secure and expand bus lanes and priority measures to improve bus punctuality and emergency response times
• Implement consistent and eye-catching bus route branding, including distinctive colours, logos, and themed designs, to make routes easily recognisable, enhance the passenger experience, and promote increased ridership.
• Adopt TfL bus standards (dual doors, accessibility) in local bus franchising and Enhanced Partnership areas
• Hold Local Transport Authorities accountable for bus services, with powers similar to London’s under Greater London Authority Act 1999
• All new buses to be zero-emission, meet TfL’s Bus Safety Standards, and include high-spec accessibility features
• Develop and deploy new zero-emission buses with features like two wheelchair spaces, multiple doors and staircases, solar panels, real-time displays
• Collaborate between TfL, LTAs, and municipal bus companies on bus safety and accessibility standards
• Reform TfL’s responsibilities to serve the Home Counties and South East England, including railway services formerly operated by Network SouthEast, under a new elected board called the 'South East Regional Transport Authority'.
• Reinstate London Passenger Transport Area to improve cross-boundary connections between Greater London and Home Counties
• Re-establish Green Line express bus services with historic route numbering in the 700s to improve connectivity in Home Counties
• Revive the Speedbus proposal from the 1970s and transit schemes from the 2000s as part of the Superloop expansion
• Use route-specific bus designs: single/dual-door midi buses for suburban areas, articulated bendy buses and tri-axle buses for high-capacity routes and Bus Rapid Transit systems
• Maintain and expand bus routes parallel to Tube and rail lines lacking step-free access, e.g., preserve Route 205 between Paddington and Baker Street
• Introduce new ticketing options: smart ticketing alternatives to PAYG, contactless payment at all stations (Project Oval), park and ride Travelcards outside Greater London
• Reform Travelcard scheme to cover more services inside and outside Greater London
• Retain and reinstate ticket offices at Tube and rail stations
• Reinstate 24-hour free travel for 60+ and older person’s Freedom Pass
• Expand Freedom Pass concession to all residents in the Home Counties and South East England
• Create an open public forum for suggestions to improve bus services inside and beyond Greater London
Implementing these proposals would significantly enhance the usability, integration, and accessibility of public transport not only in London but across the wider South East region. However, realising this vision will not be without challenges. Key recommendations—such as expanding TfL’s remit beyond Greater London, establishing a South East Regional Transport Authority, and introducing new cross-boundary ticketing schemes—would require substantial political will, legislative reform, and sustained financial support from central government.
Legislative changes would be necessary to redefine existing transport governance structures and enable a new authority to assume strategic oversight across multiple counties. Furthermore, achieving long-term funding stability for infrastructure renewal, bus modernisation, and accessibility improvements will depend on Treasury commitments and a willingness to prioritise public transport within the broader national infrastructure strategy.
Delivering this transformation will also demand close collaboration between Transport for London, local authorities, transport operators, and the Department for Transport. Without this joined-up approach, the current patchwork of service standards and funding gaps will persist—undermining national objectives on decarbonisation, levelling up, and economic growth.
These recommendations aim to stimulate conversation and set a forward-looking agenda for inclusive and future-proofed transport policy. With the Spending Review 2025 setting the stage, now is the time to take bold, coordinated action to ensure public transport meets the needs of all passengers across the capital and beyond.
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