Billions of pounds are to be pumped into local transport across the North and Midlands by the government.

Chancellor Rachel Reeves has announced the £15.6bn package for mayoral authorities which is expected to include funding to extend the metros in Tyne and Wear, Greater Manchester and the West Midlands, along with a renewed tram network in South Yorkshire and a new mass transit systems in West Yorkshire.

Announcing the investment in a speech in Manchester today (4 June), the chancellor argued that Britain “cannot rely on a handful of places forging ahead of the rest of the country” and champion a “new economic model – driven by investment in all parts of the country”.

She has also confirmed that next week’s spending review will include changes to the rules in the Treasury’s Green Book that determine whether projects receive funding.

Green Book rules have been criticised in some quarters for favouring investment in London and the Southeast, with Labour MP Jeevun Sandher, a member of the Commons Treasury Committee, saying in April it had a “hardwired London bias”.

Today she said changing the rules will ensure the government “gives every region a fair hearing when it comes to investments”.

But it will also mean more money for areas of the North and Midlands.

The investment to be announced today includes:

• £2.4bn for the West Midlands to fund an extension of the region’s metro from Birmingham city centre to the new sports quarter.
• £2.1bn to start building West Yorkshire Mass Transit by 2028.
• £2.5bn for Greater Manchester for projects including new tram stops in Bury, Manchester and Oldham and an extension of the tram network to Stockport.
• A £1.5bn investment in South Yorkshire will include £530m to renew the region’s trams.
• £800m for the West of England, including £200m to develop mass transit links between Bristol, Bath, South Gloucestershire and north Somerset.
• £1bn for the Tees Valley with £60m likely to fund a platform 3 extension at Middlesborough station, unblocking the local network.
• £2bn in the East Midlands for esigning a new mass transit system to connect Derby and Nottingham, encompassing road, rail and bus improvements across the Trent Arc corridor.

Transport secretary Heidi Alexander said the announcement “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”.

Tracy Brabin, mayor of West Yorkshire, said: “It is time for trams - today is a huge moment for our region.

“The chancellor's backing means we now have the investment needed to bring trams back to the streets of Leeds and Bradford - improving public transport connections and boosting growth.

“We will also be able to take forward other vital projects, including new bus stations for Bradford and Wakefield, which will help us create a better-connected region that works for all.”

West Yorkshire Combined Authority will publish its preferred route options later this year, with a full public consultation planned during 2026.

The £2.5bn mass transit programme will have spades in the ground by 2028, with the intention for the first trams to be operating before the mid-2030s.

The project will improve local transport for over 675,000 people and benefit those in some of West Yorkshire's most deprived communities.

Last year the combined authority asked for the public’s views on different route options, with 4,845 individuals and organisations in total having their say.

Today's news has been cautiously welcomed by the ACE Group - comprising the Association for Consultancy and Engineering (ACE) and the Environmental Industries Commission (EIC) - which has urged government to ensure full funding will be in place to deliver the transport projects. 

Kate Jennings, CEO of ACE Group, said: “While ACE Group applauds the ambition behind these initiatives, we urge the government to ensure that funding commitments extend beyond business case development to full design, construction, and delivery.

“These projects have huge potential to transform communities and drive regional growth, closing the productivity gap with London, but their success depends on comprehensive funding from start to finish. Partial funding risks delays, cost overruns and unfulfilled promises”

Ben Brittain, director of public affairs at ACE Group, added: “Funding certainty is vital for successful delivery of transport projects that goes beyond electoral cycles. This will allow industry to drive innovation, effectively manage costs and improve productivity enabling these transport projects to be delivered successfully.

“The lesson from transport infrastructure delivery around the globe is that successful delivery depends on full commitment and full funding.”

Alongside this, ACE Group is calling for transparent timelines, robust oversight, and sustained investment to ensure these projects deliver tangible benefits for passengers, local economies and the environment.

Some projects being backed today, such as the development of a mass transit network in West Yorkshire, formed part of Rishi Sunak’s “Network North” plan intended to compensate for the decision to scrap the HS2 line north of Birmingham.

After coming to power last July, Labour launched a review of those projects, arguing they had not been fully funded.

Wednesday’s announcement is the first from the spending review due on 11 June that will set out the Government’s day-to-day departmental budgets for the next three years and investment budgets for the next four.