MANCHESTER, England – British finance minister Rachel Reeves will on Wednesday commit 15.6 billion pounds ($21.1 billion) of funds for transport projects in cities outside London, dogged by years of under-investment and unfulfilled promises.
In a speech in Manchester, northwest England, Ms. Reeves is due to announce the first investment commitments from her June 11 Spending Review – which sets the budgets for government departments for the rest of the parliamentary term, the finance ministry said.
Prime Minister Keir Starmer’s Labor government, which suffered heavy defeats in local elections this year, is under pressure to show it is delivering improvements to public services and infrastructure.
Britain suffers extremely poor rates of productivity in its cities outside the capital when compared to peer countries, with outdated and limited transport links identified by organizations like the OECD as a key factor.
“A Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” Reeves said in excerpts of her speech provided by the finance ministry.
She added that this kind of thinking created growth in too few places and had created large gaps between regions.
Most of the 15.6 billion pounds of investment was earmarked by the previous Conservative government of former Prime Minister Rishi Sunak when he cancelled part of a high-speed north-south rail line and promised to reallocate the cash to local projects.
However, many city regions have been left waiting for a go-ahead from London.
Wednesday’s announcement represents a budget commitment to fund transport projects between 2027/28 and 2031/32.
They include investments in metro networks in the West Midlands, Greater Manchester, the North East and South Yorkshire, as well as a first mass transit system for West Yorkshire – a city region of 2.3 million people.
“These projects can then give firms involved in the supply chains real confidence to start planning and investing in their local economies,” said Jonny Haseldine, head of business environment at the British Chambers of Commerce.
Britain has held periodic government spending reviews since 1998, but this is the first since 2015 to cover multiple years, other than one in 2021 focused on the COVID pandemic.
The non-partisan Institute for Fiscal Studies said on Monday this spending review could prove to be “one of the most significant domestic policy events” for the Labor government. – Reuters
