Councils across the West Midlands face a hike in the amount they pay into a transport budget which funds free or half price travel passes. Members of the West Midlands Combined Authority (WMCA) Board will discuss the authority’s draft budget proposals for 2025/26 when it meets on Friday (January 10).
And part of the proposal includes raising the transport levy which all seven member councils contribute too, by a total of £3.6 million from £119.35 million to £122.94 million to ensure a balanced budget can be delivered. A report to the board said the authority faced a £93 million funding gap due to pressures such as inflation, loss of funding and historic decisions not to increase it previously.
It added around 76 per cent of money raised is used to pay for the English National Concessionary Travel Scheme, local policies that provide free or half-priced bus, train and tram travel for those who qualify, as well as funding subsidised bus services and accessible transport. Board members will be asked to agree to go to the consultation phase of the proposal at the meeting.
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Legislation allows WMCA to raise money for transport initiatives through a levy on Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton councils. If approved, Birmingham will go from paying £46.78 million to £48.09 million in 2025/26, Coventry will go from £14.37 million to £14.88 million, Dudley will go from £13.13 million to £13.47 million, Sandwell from £13.91million to £14.33 million, Solihull from £8.8 million to £9.02 million, Walsall from £11.56 million to £11.91 million and Wolverhampton from £10.81 million to £11.23 million.
The report said: “The Transport Levy is an essential tool for funding the regional transport systems, providing resources for developing and maintaining transport infrastructure and supporting regional economic growth and connectivity. The (medium term financial position) currently reflects a funding gap within the transport function of £93.6m for 2025/26.
“While the Autumn budget announcement confirmed a short term solution that will allow WMCA to set a legally balanced budget for 2025/26, a long term solution needs to be identified in 2025 for implementation in 2026/27 onwards. From the series of engagement during 2024, the Mayor and Leaders have reconfirmed the ambition to protect the transport network for as long as possible and continuation of existing policy choices.
“Currently around 76% of the Levy is used to fund the English National Concessionary Travel Scheme as well as local policies that provide free or half-priced bus, train and tram travel for those who qualify, as well as funding subsidised bus services and accessible transport. An increase in the levy represents decisive local action to address the historic decisions driving some of the funding deficit, while balancing the acute financial pressures that WMCA’s constituent members face in balancing their own budgets.”