A major financial crisis threatening the West Midlands transport network has been largely averted after authorities successfully tackled a massive budget shortfall.
Closing the Funding Gap
Finance chiefs at the West Midlands Combined Authority (WMCA) revealed that a projected funding gap of £119.8 million for the 2026/27 budget year has been substantially reduced to £38.3 million. Officials confirmed that additional measures planned for the coming year aim to further diminish this remaining deficit.
The dramatic improvement follows a series of decisive actions already implemented, including generating significant efficiencies and using financial flexibilities to transfer capital funding to revenue streams. This coordinated approach has played a crucial role in clawing back the substantial deficit that had loomed over the region's transport services.
Key Measures Driving the Recovery
Two critical decisions made during the same WMCA Board meeting contributed significantly to the budget recovery. Members approved a three per cent increase in the Transport Levy paid by each of the seven local authorities within the combined authority. Additionally, they agreed to implement a hike in Midland Metro fares, which bosses stated was necessary for the system's 'financial sustainability'.
West Midlands Mayor Richard Parker expressed confidence in the turnaround, stating: "I believe, with the fantastic work of officers, we've now got ourselves in a position where we have confidence where we have a budget that will balance and allow all of us to focus on making a difference to our communities that we need to make."
Local Leaders Acknowledge Progress Amid Concerns
Birmingham City Council leader John Cotton described the moment as particularly significant, noting: "I want to acknowledge how important this moment is in eliminating a deficit that has sat in this budget for a very long time. I joined the Combined Authority Board in May 2023 and it felt like every single meeting was concerned with this apparently irresolvable issue."
However, not all responses were without reservation. Walsall Council leader Mike Bird voiced concerns about the three per cent Transport Levy increase, which will raise an additional £3.7 million for the Combined Authority. He noted that this would mean an extra bill of approximately £400,000 for Walsall at a time when councils haven't yet received their financial settlements.
Despite initially requesting a deferral until January when settlement figures would be clear, Councillor Bird ultimately supported the measure, acknowledging the thorough financial work and stating he wouldn't push for deferral "in the spirit of cooperation."
The resolution marks a critical step toward financial stability for the West Midlands transport network, ensuring continued investment and service delivery across the region.
