EEH spared to oversee growth corridor as DfT ends STB funding

The future is in doubt for most of the seven non-statutory sub-national transport bodies (STBs) in England, after notification from the DfT that the funding it provides will end in 18 months' time.

The DfT has, however, indicated a reprieve of its support to England’s Economic Heartland STB in the light of its significance in respect of supporting development of the Oxford to Cambridge Growth Corridor and the role that East West Rail plays in that.

EEH sources suggest that the Department has said it is keen to work with it to explore a longer-term role in the corridor. In the meantime, EEH has elected a new Chair, which appears to reflect confidence that it has a positive future.

LTT has heard much less welcome news about the future from a number of the other STBs given that they will lose their DfT funding with effect from March 2027. This was advised by letter to them from the DfT about two weeks ago, with it suggesting they explore how to continue with support from their constituent members.

The one statutory STB, Transport for the North, is understood to have survived the cull, but its actual funding position is unclear. It has a more highly developed role than the others and a unique regional identity. 

In addition to TfN and EEH, the others are Transport East, Transport for the South East, Midlands Connect, Western Gateway, and Peninsula Transport. These are collaborative partnerships, generally hosted by individual local authorities with seconded personnel, that work at an intermediate level with local, regional, and national bodies to plan, fund, and deliver strategic transport infrastructure and services for their respective areas.

The DfT told LTT: "Through record levels of transport investment, the government is empowering locally elected leaders to shape transport services that reflect the needs of their communities. 

"We’ve already allocated billions to local and mayoral authorities as part of the Spending Review. We’re not cutting our support for transport services – we’re shifting funding to local leaders, putting decisions in the hands of those who know their areas best.”

The DfT confirmed that STB funding will be phased out by March 2027. But it declined to give us sight of the individual letters to the STBs so we could report the precise position at each accurately.

“EEH received a letter some weeks ago, and is the one STB that will be retaining its funding, which clearly we are very pleased about,” Oxfordshire Council leader Liz Leffman, who was until recently EEH chair, told LTT. 

The leader of Central Bedfordshire Council, Cllr Adam Zerny, has been appointed the new Chair of EEH, and the leader of Buckinghamshire Council, Cllr Steven Broadbent, as Vice-Chair, following the end Leffman’s two-year tenure as Chair.

Cllr Zerny said it was “an incredibly exciting time” for the region. “The Chancellor has publicly highlighted the huge economic potential of our region, and has cited the Oxford to Cambridge Growth Corridor as a cross-governmental priority. 

“We have internationally significant developments on the way such as Universal Studios, East West Rail, proposals for three new towns, expansion of London Luton Airport and just beyond our boundaries, Heathrow and Stansted,” said Zerny. “All these projects offer huge opportunities for EEH to support its members, and ensure infrastructure such as East West Rail becomes a catalyst for improved transport connectivity.” 

He thanked Liz Leffman for her “superb leadership over the last two years during which EEH has significantly strengthened its cross-regional working, convening powers, analytical capabilities and expertise. 

“I’m very pleased DfT recognises EEH’s importance to realising the region’s potential and is providing longer-term funding which will enable this vital work to continue into the future.”

Leffman added: “As the only democratically-led regional body within the Oxford-Cambridge Growth Corridor, I believe EEH has a vital role in helping to realise our economic, social and environmental ambitions for the region.”

Of the seven STBs that operate on a non-statutory basis, the bulk of their income comes from DfT subventions of around £1m a year each, along with modest subscriptions from their constituent local authorities. 

Transport for the North is the exception having been given formal status when set up alongside then Chancellor George Osborne’s ‘Northern Powerhouse’ initiative a decade ago, and has its own staff establishment of more than 100, and a turnover of £15.25m in the 2024/5 financial year.

The official notification of the funding wind down came in the recent letters from the DfT sent to the STBs, but question marks were already raised over their future when the Government’s Devolution and Local Government white paper last autumn failed to mention them, and indicate a role within the new landscape of multi-council mayoral combined authorities proposed across the country to deliver Strategic transport responsibilities.

Funding prospects and planning horizons have been unclear since DfT officials began telling the individual STBs that they could not say what money would be available after the current year.

It was reported to one STB board earlier this year that, “DfT confirmed there is no more information about future funding for STBs at this stage.”

The key message was that the process had now entered a business planning phase, during which the Government would make decisions on individual projects, including STB-related funding. “No specific funding allocations have been made yet, but announcements are expected in due course.” It now seems the decision to stop funding has since been made, but not publicly announced.

It appears the DfT, and no doubt the Treasury and Chancellor, only wish to support those STBs nurturing specific major projects such as East-West Rail and other infrastructure schemes highlighted in the Chancellor’s spending review. One STB said there was hope that “Projects not directly referenced in the spending review may still receive funding announcements late.”

Another STB this summer reported: “Future funding remains uncertain, raising concerns about operational sustainability. A couple of markers for options to be considered include: If no funding confirmed for next year, the STB would have to wind down, the team can carry on for at least six months, providing a short-term buffer, but it will be a decision for the Board to decide management/disposal of any remaining assets.

Bad news for STBs who were  waiting for DfT funding clarity

Typical of the STB finances is the position indicated in the Transport East Business Plan 2025-26, with council subscriptions of £279,286 and a DfT allocation of £1,040,667.

Costs for the previous year were £1,319,953, including staff time costs. Expenditures and outputs indicated were ‘Operational excellence and a devolution partner £285,650; Build regional capacity and capability £484,826; Integrate transport at a regional level £315,577; and Lead the East’s ‘Single Voice’ to put our transport priorities on the UK map £233,900.

The local contributions, established in 2019 and set out in the Terms of Reference, have part-funded the Transport East team, all non-technical work, operations and communications activities.

“It is important to maintain a local funding to ensure the ongoing growth of Transport East, ensure independence from government, and as a base to continue to leverage increased grant funding from the Department for Transport,” the most recent STB board report said.

Transport East has had a formal Memorandum of Understanding with all local authority members including a year-on-year membership subscription increase.

Since 2020/21, “and in response to the demonstrable financial and political commitment from local partners”, Transport East has received funding from the DfT to support the delivery of its work programme.

Action areas at Transport East during the current financial year have focused on enhancing the STB’s capacity and capability offer for local authorities, Enhancing BERTIE – Transport East’s Agent-Based Transport Model, Expanding the work of the Rural Mobility Centre of Excellence, and East-West cross-border growth and connectivity. The delivery of the 2025/26 business plan was reliant on the availability of DfT funding, the board report noted, though Transport East said then that it would continue to explore alternative funding sources, partnership working and commercial opportunities.

As well as their strategic and local co-ordinating roles, the Department for Transport has publicly identified the STBs in recent years as variously leading professional practice on specific areas of strategy and delivery development, as well as having a capability to support their constituent authorities on policy and technical matters like rural transport, decarbonisation and the EV transition. “The increased collaboration between STBs has proven to add value to both the individual STBs and the DfT,” one STB claimed.

The Western Gateway Partnership Board Meeting Finance report on 17 September recorded the end-of-year position for the 2024/25 financial year, as income of  £996k, “including a notable increase in DfT grant funding compared to the previous year”. There had been no confirmation of funding for the next year (2026/27) raising concerns about operational sustainability, and the possibility that the STB would have to wind down with the Board having to decide on disposal of any remaining assets. “Clarity on funding is expected by September, when the Board will be invited to provide feedback, guidance, or preferences on the presented funding options.” 

That reality will clearly kick in now.