Reeves confirms £15.6bn for transport projects outside London

Chancellor Rachel Reeves will on Wednesday confirm £15.6 billion in funding for transport projects in cities outside London. These areas have faced years of under-investment and delayed infrastructure plans.

Reeves is expected to make the announcement in a speech in Manchester, outlining the first commitments from her June Spending Review, which sets budgets for government departments for the remainder of the parliamentary term, according to the finance ministry.

Prime minister Keir Starmer’s Labour government, which faced major setbacks in local elections this year, is under pressure to demonstrate improvements in public services and infrastructure.

Cities outside London in the UK have long suffered from low productivity compared to other developed countries. Outdated and inadequate transport networks have been identified by organisations such as the OECD as a key reason.

“A Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” Reeves said, in speech excerpts shared by the finance ministry.

She said this approach had concentrated growth in limited areas and widened regional gaps.

Much of the £15.6bn funding had been initially earmarked by the previous Conservative government under Rishi Sunak, who cancelled part of a north-south high-speed rail line and pledged to redirect the money to local transport projects.

However, several city regions have since been waiting for formal approval from the central government.

The commitment announced on Wednesday will fund transport projects scheduled between 2027/28 and 2031/32.

The funding will go towards metro network developments in the West Midlands, Greater Manchester, the North East and South Yorkshire. It also includes the first mass transit system for West Yorkshire, a city region with a population of 2.3 million.

“These projects can then give firms involved in the supply chains real confidence to start planning and investing in their local economies,” said Jonny Haseldine, head of business environment at the British Chambers of Commerce.

While the UK has conducted spending reviews since 1998, this is the first multi-year review since 2015, apart from a shorter review in 2021 that focused on Covid-related spending.

The Institute for Fiscal Studies said on Monday that this spending review could become “one of the most significant domestic policy events” for the Labour government.

(With inputs from Reuters)