Rachel Reeves is set to announce £15.6 billion worth of funding for local transport projects in the North, Midlands and South West of England.
The funding will be allocated to various Mayoral Combined Authorities to promote investment into infrastructure and service projects like South Yorkshire’s tram network and a metro extension in the West Midlands.
The announcement comes ahead of next week’s Spending Review and will more than double the capital invested in the North’s transport system.
Funding will be allocated during a five year period between 2027/28 and 2031/32, with some authorities receiving funding earlier (in 2025/26 and 2026/27) to fund vital projects.
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.
“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.”
The government’s Bus Services Bill reached its second reading in the Commons on Monday. If passed, it would lift the ban on local councils taking ownership of their bus routes, a power that Mayoral Combined Authorities have had since 2017.
Since 2017 major cities like Manchester and Blackpool have taken bus provisions under public ownership, with the additional funding looking to expand these services in existing cities and would give other authorities the fiscal freedom to pursue similar projects.
In a speech in Greater Manchester today, 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.”
Henri Murison, Chief Executive of the Northern Powerhouse Partnership, echoed this, saying that the government’s decision “to back major local transport projects with serious, long-term investment” is a “critical” step in closing the “productivity gap with London”.
The plans have however been criticised by the Conservatives. Shadow Chancellor Mel Stride MP said: “Labour’s promises lack any serious plan. This week’s defence announcement is a prime example – bold words but no answers.
“They’ve betrayed pensioners, farmers, and hardworking families, all while making empty tax promises that simply don’t add up.
“Between Labour and Reform, it’s a race to promise everything to everyone – with no way to pay for it. Britain deserves better than broken pledges and reckless leadership.”
The Liberal Democrats welcome the planned investments, but have warned Labour that they must not lead local communities “up the garden path” and have criticised the government’s decision to raise the bus fare cap from £2 to £3.
Lib Dem Treasury spokesperson Daisy Cooper MP said: “These communities have heard these same promises before, only to be left with phantom transport networks. We must not see people led up the garden path once again.
“This is a welcome and much-needed investment in public transport but the Chancellor’s words will ring hollow for many who have seen their bus fares hiked to £3 under Labour, or those in rural communities who barely have a bus service at all.
“Extra investment in public transport must also focus on cutting fares for hard-pressed families being clobbered by a cost of living crisis.”
The government provided an outline on how the money would be allocated and spent:
| West Midlands | £2.4 billion | Metro extension connecting Birmingham City Centre to new sports quarter, unlocking £3bn investment from private investors. |
| West Yorkshire | £2.1 billion | Construction of 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 |
| 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 and a 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, 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. 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 | £800 million | £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. |
Featured image via Tupungato / Shutterstock.
Author: Jamie Calder
