The infrastructure sector has welcomed the government’s announcement to invest £15.6bn in regional transport.

Chancellor Rachel Reeves has unveiled the first investment announcements from the Spending Review, with billions set to boost local transport projects in England’s city regions – including South Yorkshire, the North-east, the East Midlands and Tees Valley. 

The government says the funding – 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.

The funding is expected 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.

Reeves also confirmed next week’s spending review will include changes to the rules in the Treasury’s Green Book that determine whether projects receive funding. She said changing the rules will ensure the government “gives every region a fair hearing when it comes to investments”.

Consultancy Mott MacDonald said the announcement marked “a significant moment for the future of transport in the UK”.

Thomas Knight, Mott MacDonald’s transport market lead for UK and Europe, said: “The chancellor’s emphasis on rewriting Treasury investment rules to prioritise productivity in the Midlands and the North is a clear signal that infrastructure is being placed at the heart of the UK’s growth strategy.

“This is a shift we strongly support. Infrastructure is not just about physical assets, it’s about creating opportunity, reducing inequality and building resilience.

“The £2.1bn allocated to begin construction of the West Yorkshire Mass Transit system by 2028 is a significant step forward for the region. We are already working closely with local partners to help deliver a network that will transform how people move, connect and thrive across West Yorkshire.

“The overall commitment of an additional £15.6bn for trams, trains and buses is a bold and welcome step that will help unlock economic potential, improve connectivity and support communities across the country.

“Mott MacDonald is working with Transport for the West Midlands in collaboration with Birmingham City Council and Solihull Metropolitan Borough Council on these transformative programmes. The £2.4bn investment will be key to delivering the benefits identified for the local communities.”

Ann Gordon, transport market director UK and Ireland at Ramboll, also welcomed the news. She said: “It is fantastic to see investment into local infrastructure. Transport can be an extremely positive catalyst for economic change, this much needed £15.6bn cash injection should be welcomed by both industry and local authorities.

“The economic boost offered by transport investment, should also support the wider ambition of creating a more sustainable, resilient and liveable society.

“Connecting communities and providing access to active and public travel options will support social inclusion and the building of places where people can thrive. Alongside reducing emissions and improving air quality, I look forward to seeing how this investment will also support biodiversity as part of biodiversity net gain commitments.”

Transport for the North chief executive, Martin Tugwell, added: “Better connectivity is fundamental to unlocking sustainable and inclusive growth. If people are unable to move around easily because of poor transport options it means the whole local economy is held back.

“These vital investments will help to improve the transport connections for our city regions. TfN is committed to working with our mayors and political leaders in the North to help deliver these schemes.

“We are also pleased to hear that the chancellor has listened to the advice from TfN and others in the North to reform the Treasury’s ‘Green Book’, to drive more investment in all regions. We will continue to work closely to inform that review with the North’s data and evidence.”