Chancellor of the Exchequer Rachel Reaves presented the Autumn Budget, outlining a comprehensive policy plan to “fix the foundations of the economy and deliver change by protecting working people, fixing the NHS, and rebuilding Britain.” Central to this plan is a robust commitment to sustainable transport and infrastructure, with significant policy measures designed to modernise the UK’s transport network, boost economic growth, and promote environmental sustainability.
Key Policy Highlights for Sustainable Transport
The budget allocates over £100 billion in capital investment over the next five years, with a substantial portion earmarked for transport infrastructure. This investment is designed to unlock growth-enhancing schemes such as East West Rail, which will connect Oxford, Milton Keynes, and Cambridge, supporting the wider Cambridge life sciences cluster.
Transport Investment Policy
The budget includes a £22.1 billion investment in transport capital projects for 2023-24, with plans to maintain this level at £21.8 billion by 2025-26. This investment is crucial for modernising the UK’s transport infrastructure and supporting the transition to sustainable modes of transport.
Rail Sector Reforms
The government has committed to improving the performance and reliability of rail services, with the Secretary of State for Transport planning reforms to fares, services, and workforce practices. These changes aim to deliver a modern railway that meets the needs of today’s travellers, increasing efficiency and reducing costs while boosting ridership and revenue.
Electric Vehicles and Charging Infrastructure
The transition to electric vehicles (EVs) is a cornerstone of the government’s decarbonisation strategy. The budget includes over £200 million in 2025-26 to accelerate the rollout of EV chargepoints, including support for local authorities to install on-street chargepoints across England. Additionally, £120 million is allocated to support the purchase of new electric vans and the manufacture of wheelchair-accessible EVs.
Infrastructure Projects
The budget confirms funding for several key infrastructure projects, including the Transpennine Route Upgrade, which will transform northern rail connectivity, and the progression of HS2 Phase One to improve connectivity between London and Birmingham. The government is also investing in local roads maintenance, with a nearly 50% increase in funding for 2024-25, aiming to fix an additional one million potholes across England each year.
New Institutions and Reforms
The government will establish the National Infrastructure and Service Transformation Authority (NISTA) to ensure the effective delivery of infrastructure projects. This new institution will combine the functions of the National Infrastructure Commission and the Infrastructure and Projects Authority, driving more effective infrastructure delivery across the country.
Energy Profits Levy
To support the transition to clean energy, the government is increasing the Energy Profits Levy (EPL) by three percentage points to 38% and extending its application until 31 March 2030. This move is designed to ensure that oil and gas companies contribute more to the energy transition, providing long-term certainty on taxation for the industry.
Department for Transport Settlement
The Department for Transport’s (DfT) settlement provides total DEL funding of £30.0 billion in 2025-26. This delivers a £1.2 billion year-on-year cash increase in 2025-26. The audit of public spending in July identified £3.5 billion of unfunded pressures related to transport in 2024-25 and over £800 million in unfunded capital commitments in 2025-26. In response, the government cancelled several low-value and unaffordable programmes, including the A303 Stonehenge tunnel, the A27 schemes, and the Restoring Your Railway programme.
Local Transport and Infrastructure
Well-targeted transport investment is a key contributor to the government’s economic growth mission and drives productivity growth by increasing access to labour markets and unlocking areas for wider development, including housing. The settlement provides increased investment in local road maintenance and local transport, supporting everyday journeys and addressing poor connectivity within towns and cities across the country.
Key measures include:
- A £500 million cash increase on 2024-25 local roads maintenance baseline funding.
- An additional £200 million for City Region Sustainable Transport Settlements, bringing local transport spending for Metro Mayors in 2025-26 to £1.3 billion.
- Over £650 million of funding for local transport beyond City Region Sustainable Transport Settlements in 2025-26.
- Over £1 billion in funding to support local areas and bus operators in 2025-26, providing high-quality bus services across the country.
- £485 million for Transport for London (TFL)’s capital renewals programme in 2025-26.
- An additional £100 million investment in cycling and walking infrastructure in 2025-26.
Major Transport Projects
The settlement secures the delivery and development of growth-enhancing major transport projects, providing critical connectivity between the biggest economic centres and supporting the development and delivery of new housing. Key projects include:
- Committing to East West Rail between Oxford, Milton Keynes, and Cambridge.
- Delivering the Transpennine Route Upgrade between York and Manchester, via Leeds and Huddersfield.
- Progressing HS2 Phase One to improve connectivity between London and Birmingham.
- Confirming funding to tunnel from Old Oak Common to Euston to ensure HS2 trains terminate in central London.
- Progressing key strategic road schemes, such as dualling sections of the A47 and the A57.
Decarbonising Transport
Transport is key to the government’s clean energy mission. The settlement provides further support to decarbonise the transport sector by:
- Investing over £200 million in 2025-26 to accelerate the rollout of electric vehicle charging infrastructure.
- Providing £120 million in 2025-26 to support the purchase of new electric vans and the manufacture of wheelchair-accessible electric vehicles.
- Extending the Advanced Fuels Fund for a further year to support the producers of sustainable aviation fuel.
Rail Performance and Financial Sustainability
The settlement will also support the government’s ambition to improve the performance and reliability of rail services, ensuring the rail sector can operate effectively and become financially sustainable. The government confirms that the annual regulated rail fares cap will rise by 4.6% on 2 March 2025, one percentage point above RPI. This will be the lowest absolute increase in three years. Subject to an industry proposal, the government will also agree to a £5 increase to the price of most rail cards (except the disabled person’s rail card). These policies will support the Secretary of State for Transport’s plans for reform, which will increase efficiency and reduce costs, while boosting ridership and revenue and improving performance.
Unaffordable Road Schemes
As part of the government’s commitment to growth, it will take difficult decisions where there is not a clear value for money case to invest. After a review, the Transport Secretary has decided not to progress with the following unfunded and unaffordable road schemes on the strategic road network: A5036 Princess Way, A358 Taunton to Southfields, M27 J8 Southampton, the A47 Great Yarmouth Vauxhall Roundabout, and A1 Morpeth to Ellingham.
Department for Energy Security and Net Zero Settlement
The Department for Energy Security and Net Zero (DESNZ) settlement provides total DEL funding of £14.1 billion in 2025-26. This is equivalent to an annual average real-terms growth rate of 22.0% from 2023-24 to 2025-26, excluding balance sheet impacts.
Making Britain a clean energy superpower is one of the five missions of this government. Great British Energy (GBE) will be at the heart of the mission, and to kick-start GBE’s work, the settlement provides £100 million capital funding in 2025-26 for clean energy project development. The settlement also provides £25 million to establish GBE as a company, headquartered in Aberdeen. As GBE is established, the investment activity will be undertaken by the National Wealth Fund, helping it to make initial investments as quickly as possible and draw on the National Wealth Fund’s resources, experience, and pipeline of projects.
The settlement provides £3.9 billion in 2025-26 for the first carbon capture and storage (CCUS) clusters in the UK. In supporting these projects, the government is equipping the industry with the tools it needs to kick-start the CCUS and hydrogen industries, delivering clean energy investment and jobs.
The settlement also provides over £1 billion of funding over three years to fund hundreds of local energy schemes to help decarbonise the public estate through the Public Sector Decarbonisation Scheme.
Clean energy industries will be supported to create green jobs across the UK. The government will provide support for the first round of electrolytic hydrogen production contracts, harnessing renewable energy to decarbonise industry across the length and breadth of the UK. The settlement will provide £134 million to support the delivery of port infrastructure to facilitate floating offshore wind. To support existing firms in decarbonising and growing, the settlement confirms £163 million to continue the Industrial Energy Transformation Fund from 2025-26 to 2027-28.
New nuclear will play an important role in helping the UK achieve energy security and clean power while securing thousands of good, skilled jobs. The settlement provides £2.7 billion of funding to continue Sizewell C’s development through 2025-26. The process to raise equity and debt for the project will shortly move to its final stages and will conclude in the Spring. As with other major multiyear commitments, a Final Investment Decision on whether to proceed with the project will be taken in Phase 2 of the Spending Review.
Great British Nuclear’s Small Modular Reactor competition is ongoing and has entered the negotiation phase with shortlisted vendors. Final decisions will be taken in the spring.
Department for Business and Trade Settlement
The Department for Business and Trade (DBT) settlement provides total DEL funding of £3.3 billion in 2025-26. This is equivalent to a real-terms growth rate of 10.0% from 2023-24 to 2025-26.
Most of the department’s funding for 2024-25 and 2025-26 will focus resources on delivering the government’s growth mission. This includes activity covering industrial strategy, small business support, market frameworks, and trade and investment.
DBT’s settlement supports the development and delivery of the government’s modern Industrial Strategy, which will provide stability for investors and give them confidence to plan over the next 10 years and beyond. For areas of the Industrial Strategy led by DBT, Autumn Budget 2024 confirms:
- Advanced manufacturing sector support to unlock investment across the UK, including £975 million dedicated to the aerospace sector and over £2 billion for the automotive sector up to 2030.
- Funding to establish an Industrial Strategy Advisory Council that will provide expert advice to the government on industrial strategy, developed in partnership with businesses, unions, and stakeholders from across the UK.
DBT’s settlement also provides funding to support steel and other energy-intensive industries:
- To support the transformation of UK steel production, the government has agreed to an improved deal with Tata Steel, including £500 million in grant support.
- Continued support for Energy Intensive Industries through around £350 million of funding across 2024-25 and 2025-26.
DBT’s settlement provides small businesses with the support they need to start up and grow in the UK, creating jobs and prosperity for people all over the country. The Budget confirms:
- Over £1 billion across 2024-25 and 2025-26 for the British Business Bank to enhance access to finance for small businesses.
- Over £200 million for wider small business support, including continued funding for practical support through Growth Hubs and Help to Grow Management.
- Funding for the Made Smarter Adoption programme will double to £16 million in 2025-26, supporting more small manufacturing businesses to adopt advanced digital technologies.
DBT’s settlement will help to establish clear rules, regulations, and standards that promote stability, fairness, and transparency to deliver economic confidence. This includes delivering the Make Work Pay plan to help more people to stay in work, improve job security, and boost living standards. The Budget includes over £150 million in 2024-25 and 2025-26 for:
- National Minimum Wage enforcement to ensure workers are treated fairly.
- The Advisory Conciliation and Arbitration Service (ACAS) to help employers and employees get free, impartial advice on workplace rights, rules, and best practice.
DBT’s settlement provides over £400 million across 2024-25 and 2025-26 to ensure markets work effectively, consumers are protected, and that regulation is effective without being excessively burdensome. This includes funding for:
- The Office for Product Safety and Standards (OPSS) to protect people and places from product-related harm.
- The Insolvency Service to support those in financial distress, tackling financial wrongdoing and maximising returns to creditors.
- Companies House to continue driving confidence in the economy by creating a transparent and accountable business environment.
DBT’s settlement supports international trade, attracting foreign direct investment and helping UK businesses in expanding their global reach. The Budget includes support of over £500 million in 2024-25 and 2025-26 for:
- Supporting inward investment, including through the expanded Office for Investment.
- DBT’s overseas network, to promote UK trade and investment all over the world.
- Trade policy capacity to support trade negotiations, deliver the Trade Strategy as part of the growth mission, and support wider international trade policy engagement.
Conclusion
The 2024 Autumn Budget represents a significant step forward in the new Labour government’s commitment to sustainable transport and infrastructure. With substantial investment in transport projects, reforms to the rail sector, and support for the transition to electric vehicles, the budget aims to drive economic growth while promoting sustainability.
Picture by Lauren Hurley / DESNZ CC BY-NC-ND 2.0
