Biggest ever investment in city region local transport as Chancellor vows the ‘renewal of Britain’

Wednesday, 4 June 2025 00:01

Working people across the North, Midlands and the South West will benefit from the biggest ever investment in buses, trams and local train infrastructure in city regions as the Chancellor today promises the renewal of Britain to make all parts of the country better off. In a speech in Greater Manchester, Reeves is expected to say that “a Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” adding that the “result of...Request free trial

In a speech in Greater Manchester, Reeves is expected to say that “a Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” adding 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.”

Reeves will say the Spending Review next week will take different choices, with investment in a “new economic model – driven by investment in all parts of the country, not just a few.”

She will unveil the first investment announcements from the Spending Review, with £15.6 billion of funding for local transport projects in England's city regions – including South Yorkshire, the North East, the East Midlands and Tees Valley. The funding – 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 to invest in transport projects that will make a difference to their local area.

Transport Secretary Heidi Alexander, said:

“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 will see projects like the Metro extension linking Washington to Newcastle and Sunderland and the renewal South Yorkshire's tram network linking employment and housing areas in Sheffield and Rotheram get off the ground - creating jobs, better commutes, bigger labour markets and more opportunity.

The game-changing funding comes ahead of next week's Spending Review when the Chancellor will set out how this government is investing in the country's future and the priorities of working people to make every part of Britain better off.

The five-year settlements will mean the Mayor of West Yorkshire can commit to delivering the West Yorkshire Mass Transit, which will be fully integrated with cycling, walking, bus and rail, making journeys quicker, more accessible and more reliable across the region.

The funding will also mean the Mayor of the West Midlands can build a metro extension to Birmingham's sports quarter, making a start on his ambitions to deliver mass transit from East Birmingham to North Solihull.

It will also allow the Mayor of Greater Manchester to transform the Metrolink tram network, with new stops in Bury, north Manchester and Oldham and a Metrolink extension to Stockport town centre.

The Chancellor is also expected to confirm “a step change in how government approaches and evaluates the case for investing in our regions” following a review of the Treasury's Green Book and how it is used, “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 will be published on June 11, 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, said:

“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.”

Notes to editors

Mayoral breakdown of Transport for City Regions funding:

Mayoral Combined Authority	Funding allocation (27/28-31/32)*	Projects likely to be taken forward by mayors
West Midlands	£2.4 billion	Metro extension connecting Birmingham City Centre to new sports quarter, unlocking £3bn investment from private investors This is the first phase of new mass transit from East Birmingham to North Solihull.
West Yorkshire	£2.1 billion	Spades in the ground to start building West Yorkshire Mass Transit by 2028, with aim for first services by mid-2030s Transforming six transport corridors in West Yorkshire not covered by the mass transit routes, including through new bus stations at Bradford and Wakefield.
Greater Manchester	£2.5 billion	Major infrastructure projects to unlock new homes, jobs and better connect communities, including growing and transforming the Metrolink tram network, with new tram stops in Bury, Manchester and Oldham and Metrolink extension to Stockport A fully electric Bee Network, with zero emission public transport network across bikes, bus and tram by 2030, including purchase of 1,000 new electric buses.
South Yorkshire	£1.5 billion	£530m to renew the tram network, providing a fleet of new, replacement vehicles, modernising tram stops, as well maintenance to improve reliability. £350m to reform South Yorkshire's buses, with franchised buses operating in Sheffield, Doncaster and Rotherham by 2027 and across the whole of South Yorkshire by 2029.
Liverpool City Region	£1.6 billion	£100m for 3 new bus rapid transit routes, to the Liverpool John Lennon Airport, Everton stadium and Anfield. Buying a brand-new fleet of buses for the city region's franchised bus network, beginning with St Helens and the Wirral in 2026 and then Sefton, Knowsley, North and South Liverpool in 2027.
North East	£1.8 billion	Metro extension linking Newcastle and Sunderland via Washington, serving one of the largest advanced manufacturing zones in the UK.
West of England	£0.8 billion	£150m to improve rail infrastructure across the region, including funding to support WECA's ambitions for increased frequency of services between Brabazon and the city centre £200m for Mass transit development between Bristol, Bath, South Gloucestershire and North Somerset.
Tees Valley	£1.0 billion	£60m for the Platform 3 extension at Middlesborough station, unblocking the local network.
East Midlands	£2.0 billion	Designing a new mass transit system to connect Derby and Nottingham, encompassing road, rail and bus improvements across the Trent Arc corridor.

*Some of this funding will be brought forward to 2025/26 and 2026/27 to ensure communities see the benefit of this significant investment even earlier.