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The Transport Innovation Fund, which provides grants to cities for transport improvements that include road pricing schemes, is to be replaced.
Ministers have scrapped the programme that was aimed at boosting take-up of congestion charging in cities and will instead offer a new Urban Challenge Fund.
The move suggests the TIF was unpopular with cities because of links to road pricing with transport minister Sadiq Khan saying the new UCF would aim to support a "wider package of measures".
Khan added it would "stimulate greater innovation among local authorities and appeal to a broader range of cities".
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