The Department for Transport provides two types of grants to encourage modal shift from road to rail and water:
Freight Facilities Grant (FFG) which helps to offset the capital costs of rail or water freight handling facilities.
Rail Environmental Benefit Procurement Scheme (REPS) which assists companies with the operating costs associated with running rail freight transport instead of road where rail is more expensive than road.
Funding for both is provided by the multi-modal Sustainable Distribution Fund (SDF). The total SDF budget for 2009-10 is £30.4 million, of which £7 million is capital funding.
In addition to grants, the Government have in the last two years announced record levels of rail freight investment to support continued growth including £200 million towards the development of a Strategic Rail Freight Network and over £200 million of funding towards the provision of infrastructure enhancement for freight through the Productivity Transport Innovation Fund.