Potential funders

Options include local government, private sector and grant making funders

Local government

Government funding is normally paid to local authorities from different departments. A big change since 2010 has been the removal of ring-fencing, meaning there are fewer constraints as to how different funding streams can be spent.

The main source of local authority funding is the block grant from the Department of Communities and Local Government (CLG), which is supplemented by council tax and business rates. In relation to transport, funding from the DfT has been simplified from 26 funding streams to just four principal ones. These are:

  • Local Sustainable Transport Fund (‘LSTF’ - capital and revenue), although the fund’s future is unclear after 2015;
  • major schemes (capital), currently those over £5m, although the way this stream is due to be reformed in 2012;
  • highways maintenance (capital); and
  • Integrated Transport Block (ITB) for small transport improvement schemes (capital).


The LSTF is allocated to specific local authority bids so unless there is a further round, the only source of funding for new transport measures is the ITB. Local Transport Plans (LTPs) usually include a delivery or implementation plan that sets out measures to be considered for funding from the ITB and local authority reserves. Currently, these often cover the 2012-2015 period. Because of spending cuts there is a lot of pressure on budgets, so all the more reason for you to try to get in early with your proposals into LTPs.

New bodies called local transport boards or consortia are being set up in early 2013 to make decisions on major transport schemes. More information will be available soon.

Other forms of funding that are only likely to be relevant for major schemes, such as rail reopenings, are Tax Increment Financing (TIF) and Regional Growth Fund (RGF). It is currently envisaged that Local Transport Boards or Consortia will be set up in late 2012 to manage the process of prioritising major schemes. Other smaller funding streams have appeared including Community Transport Funding and Green Bus Funding.

Cuts to government spending and the recession make for challenging times but new local government powers and partnerships could help reduce the impact for communities that use them.

Parish councils

Parish and town councils can spend up to £5 per inhabitant on discretionary activities by raising a precept on council tax bills. They can also raise additional money for non-discretionary spending, which will not normally relate to transport, and unlike other local authorities their ability to do so is not capped by central government. You can find out more about these local councils in the Partners and Information section.

Planning system

Developers can be required to pay to contribute to new and enhanced services and infrastructure to help reduce the impact of development on the local area. The relevant law has recently been changed by the Localism Act 2011 and local planning authorities are being given the power to raise a Community Infrastructure Levy (CIL). CIL is largely replacing the previous system of ‘s106’ agreements, which is now mainly for non-financial agreements between developers and authorities.

With a system of levies in place, authorities can set charges that developers must pay in order to contribute to new or enhanced services or infrastructure. This could cover new local schools and health centres to reduce the need to travel and also cycle paths, bus stops, public realm improvements and promotion to encourage sustainable travel choices. It is not intended ‘to remedy pre-existing deficiencies in infrastructure provision unless those deficiencies will be made more severe by new development’.

The Government is able to make regulations to require local authorities to pass a proportion of CIL to the neighbourhoods where development actually takes place. It is worth finding out what the plans are in your area to do this and setting out priorities for spending CIL in a neighbourhood or parish plan.

The Government provides additional funding or a 'bonus' for new homes by match funding the additional council tax raised for new homes and empty properties brought back into use, with an additional amount for affordable homes, for the following six years. Although there is no provision for this to be paid to neighbourhoods where new homes are built, it is worth pressing local authorities to give a proportion back to the neighbourhoods affected.

More information:
Department of Communities and Local Government - Community Infrastructure Levy

Department of Communities and Local Government - New Homes Bonus

Revenue streams

There are a number of local funding streams that are usually allocated to local authority generated proposals. If a proportion of these streams were devolved, they could provide a useful, steady income for local travel initiatives.

Where enforcement of minor traffic contraventions, such as parking, has been decriminalised, any money from penalty charges that is left over after enforcement costs is kept locally rather than passed back to central government. This funding, sometimes known as ‘parking surplus’ can only be used by lower tier local authorities for specified purposes relating to transport or improving the public realm. Even if there is already decriminalised enforcement in your area, you could make the case for a proportion of the proceeds to be given over to local transport initiatives.

On-street and off-street (if it is public rather than private) parking charges are similarly kept by lower tier local authorities. Increasing parking charges can be a very controversial subject. But if all the money raised is recycled locally, such as to provide a local delivery services for those who can’t drive to shops, reducing ugly clutter on a local high street and subsidising local bus services under threat then a case could be made not just on social and environmental but also economic grounds.

If you are running a community bus service or renting out e-bikes or cycle trailers, you can charge for this to help cover costs. Having some charge in place can help ensure that people use something they borrow but setting charges too high can discourage use.

Contributions from others

There are many other groups you can work in partnership with - see the Partnership & information and planning sections for more ideas. You could either approach them for sponsorship or, where they have their own travel plan, seek to pool resources. A business trying to improve access by public transport for its staff could be willing, for example, to work with a Parish Council to provide funding to keep a local bus service operating.

Grant making funders

There are a number of large benevolent bodies that give funding to worthy projects. Competition can be fierce, however, and it can take half a year to hear back as to whether an application has been successful. Some charities only award funding in specific geographical areas, so you may have more of a chance to gain funding from them.

On-line funding

New funding models allow you to raise money from strangers on-line, building on the success of ideas such as kickstart.

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