Working people across the North, the Midlands, and the South West are set to benefit from the largest ever investment in city region buses, trams, and local train infrastructure, as the Chancellor pledged a “Renewal of Britain” aimed at levelling up prosperity across all parts of the country.
In a pivotal speech delivered in Greater Manchester, Rachel Reeves emphasised that “a Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” asserting that the “result of such thinking has been growth created in too few places, felt by too few people and wide gaps between regions, and between our cities and towns.”
The Chancellor indicated that next week’s Spending Review will mark a decisive shift, with investment prioritising a “new economic model – driven by investment in all parts of the country, not just a few.”
As part of this commitment, Reeves unveiled the initial investment announcements from the Spending Review, earmarking £15.6 billion in funding for local transport projects across England’s city regions. This substantial allocation, representing a more than double real-terms increase in capital spending on local transport in city regions by 2029/30 compared with 2024/25, will empower local leaders in areas including South Yorkshire, the North East, the East Midlands, and Tees Valley to invest in transport projects tailored to their specific needs.
Transport Secretary Heidi Alexander stated: “Today marks a watershed moment on our journey to improving transport across the North and Midlands – opening up access to jobs, growing the economy and driving up quality of life as we deliver our Plan for Change. For too long, people in the North and Midlands have been locked out of the investment they deserve. With £15.6bn of Government investment, we’re giving local leaders the means to drive cities, towns and communities forward, investing in Britain’s renewal so you and your family are better off.”
This long-overdue investment outside of London and the South East is poised to breathe life into critical projects. These include the eagerly anticipated Metro extension linking Washington to Newcastle and Sunderland, and the renewal of South Yorkshire’s tram network connecting employment and housing areas in Sheffield and Rotherham. Such initiatives are expected to generate new jobs, facilitate smoother commutes, expand labour markets, and create broader opportunities for residents and businesses.
Beyond the direct benefits to commuters and communities, this game-changing funding package presents an unparalleled opportunity for the UK’s rail, bus, and wider transport supply chain. Companies involved in manufacturing rolling stock, signalling systems, track components, station infrastructure, and digital solutions will hopefully benefit from a boost in opportunities. This sustained investment can provide firms with the confidence to plan long-term, fostering further innovation, job creation, and investment in local economies across the regions.
The five-year settlements will enable mayoral authorities to commit to ambitious projects. For instance, the Mayor of West Yorkshire can now deliver the West Yorkshire Mass Transit system, which will be fully integrated with cycling, walking, bus, and rail, promising quicker, more accessible, and more reliable journeys throughout the region.
Similarly, the Mayor of the West Midlands will be able to commence a metro extension to Birmingham’s sports quarter, kick-starting ambitions to deliver mass transit from East Birmingham to North Solihull. The funding will also empower the Mayor of Greater Manchester to transform the Metrolink tram network, with new stops planned for Bury, north Manchester, and Oldham, alongside a crucial Metrolink extension to Stockport town centre.
The Chancellor also confirmed a “step change in how government approaches and evaluates the case for investing in our regions,” following a comprehensive review of the Treasury’s Green Book. This review aims “to make sure that this government gives every region a fair hearing when it comes to investments.” The full conclusions of the Green Book review are anticipated to be published on 11th June, alongside the wider Spending Review.
Henri Murison, Chief Executive of the Northern Powerhouse Partnership, said: “This government’s decision to back major local transport projects with serious, long-term investment will be critical to driving regional growth. The economic revival of Greater Manchester, enabled by sustained investment in the tram network in particular, has already begun to close the productivity gap with London. To build on that success and replicate it across all our regions in the North, we need to see key projects delivered – including the extension of the Metro to Washington, the replacement of the Sheffield tram fleet, and the extension of Metrolink to Stockport. Too many times in the past, a trade-off was made – due to limited funding – between connectivity within and between our regions. The spending rules adopted last autumn mean this government can invest in both at the same time, unlocking far greater productivity gains than prioritising one at the expense of the other.”
Jonny Haseldine, Head of Business Environment at the British Chambers of Commerce, highlighted the broader economic impact: “The pathway to the strong and consistent growth the UK economy needs has to come through investment in our regions. That means developing regional infrastructure, including transport projects and grid connectivity, improved rail capacity and electrification of key sections of the network. These projects can then give firms involved in the supply chains real confidence to start planning and investing in their local economies. But it is critical that no corner of the UK gets left behind and regional development works in alignment with national goals.”
Ben Plowden, Chief Executive of Campaign for Better Transport, welcomed the focus on public transport: “It’s great to see the Government investing in the local transport infrastructure that will tangibly improve the lives of millions across our city regions and particularly good to see trams being prioritised in several areas. Fast, frequent and reliable public transport is essential to unlocking opportunity and driving inclusive economic growth. We hope to see similar commitments to revenue funding in next week’s Spending Review, alongside support for local authorities to plan, deliver and run the high-quality transport services their communities need.”
Mark Casci, Head of Policy and Representation at West and North Yorkshire Chamber of Commerce, concluded: “This commitment to fund mass transit in West Yorkshire can be a game changer for the region. West Yorkshire is home to a world-class business community, but the region is held back by poor connectivity which impacts upon our productivity. By delivering this much needed infrastructure upgrade to the region, West Yorkshire can finally punch its weight and deliver enhanced returns for UK PLC.”
