Spending review: Rachel Reeves pledges £15.6bn for regional transport
The government has made its biggest spending announcement since Labour’s drubbing at the local elections in May, with a pledge from Chancellor Rachel Reeves to double investment in local transport over the next five years.
A £15.6bn cash injection will form a major pillar of the 11 June spending review, which the Treasury says would amount to twice the real-terms spending in city regions by 2029/30 compared to 2024/25.
This funding is set to focus on urban regions in England across the North, Midlands and South West in “a step change in how government approaches and evaluates the case for investing in our regions”.
Chancellor Rachel Reeves will announce in a speech on Wednesday in Greater Manchester that “a Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” and 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 is expected to promise a “new economic model – driven by investment in all parts of the country, not just a few”.
Heidi Alexander, the transport secretary, said ahead of the Chancellor’s announcement: “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.
She added: “For too long, people in the North and Midlands have been locked out of the investment they deserve.
In an interview on Times Radio Wednesday morning, Alexander denied rumours of a rift with the Treasury and insisted that there is a “collegiate approach” to spending priorities around the Cabinet table.
She added: “I know the Chancellor is focused on next week making sure that across the board, we have the money in the right places so that we can deliver on the people’s priorities.”
The pathway to growth for Rachel Reeves?
The Treasury says the funding will unlock a series of key regional transport links, “to make sure that this government gives every region a fair hearing when it comes to investments”.
According to the Treasury, the funding enables measures such as a North East metro extension, the linking up of Birmingham and Solihull in the West Midlands, and an expansion of the Greater Manchester Metrolink tram network.
Funds will be split between ten mayoral combined authorities – nine Labour and one Conservative – with extra cash ranging from £800m for the West of England to £2.5bn for Greater Manchester.
Northern Powerhouse Partnership chief Henri Murison praised the announcement, saying: “This government’s decision to back major local transport projects with serious, long-term investment will be critical to driving regional growth.
“Too many times in the past, a trade-off was made – due to limited funding – between connectivity within and between our regions.”
The Institute for Fiscal Studies (IFS) think tank suggested over the weekend that the spending review will primarily boost the NHS and defence.
Meanwhile, as many as 50,000 civil service jobs could be on the line in an effort to balance the books.
This funding is expected to be rolled out incrementally from this year up until the expected end of the Parliament in 2029.