Comprehensive Spending Review boasts long-term infrastructure investment

Capital spending on transport infrastructure, particularly rail in the north, featured heavily in Chancellor Rachel Reeves’ Comprehensive Spending Review.

Adding to the recently announced £15.6bn settlements set out for England’s city regions, Reeves said the government will shortly publish its plans to “take forward our ambitions for northern powerhouse rail” while confirming £3.5bn more funding to continue upgrades on the TransPennine route between Liverpool and Leeds.

Reeves also announced £2.5bn to enable the “continued delivery” of East West Rail between Oxford and Cambridge along with funding for the Midlands Rail Hub.

Another £25bn over four years will fund the continued construction of HS2 between London Euston and Birmingham.

Railways in Wales will receive £445m for over ten years including new funding for Padeswood Sidings and Cardiff West Junction.

About £750m a year will go on bus services, including extending the £3 bus fare cap from the end of 2025 until March 2027.

Addressing the issue that past governments have underinvested in towns and cities outside London and the South East, Reeves said she was publishing the review of the Treasury’s Green Book “the government’s manual for assessing value for money”.

The spending rules have been seen as prioritising investment in the most productive areas, but following the review will “support place-based business cases and ensure no region has Treasury guidance wielded against them”.

Transport for London has been allocated £2.2bn in capital funding over four years. Andy Lord, London’s Transport Commissioner, said, “We are grateful that the Government has agreed a much-needed multi-year capital funding agreement” … "It will allow us to deliver a programme of sustainable investment, aligning our suppliers around a longer-term programme.

"Our supply chain supports growth and opportunities right across the UK. We are pleased that, together with our suppliers, we can move on from the short-term and stop-start nature of funding over recent years and get on with the vital work of making our city and our country work for everyone.

London Mayor Sadiq Khan welcomed TfL’s multi-year deal but added, “It’s also disappointing that there is no commitment today from the Treasury to invest in the new infrastructure London needs” … “The way to level up other regions will never be to level down London.”

BusinessLDN, which represents company leaders in the capital, said the city had been “shortchanged” in the review. Its Chief Executive John Dickie, said, “The acid test for this Spending Review is whether the Government’s rhetoric on growth is matched with the investment needed to kickstart the economy.

“The Chancellor has delivered some welcome additional spending on infrastructure, transport and skills.

“While the certainty provided by a four-year funding deal for Transport for London is welcome, the lack of certainty around delivering shovel-ready projects like the DLR to Thamesmead and Bakerloo line extension that could accelerate growth, create new jobs and open up sites for tens of thousands of new homes is baffling.

And while capital spending on transport increased, the Spending Review also confirmed that the Department for Transport’s budget will fall 5% in real terms over the next four years, with savings to be found through the creation of Great British Railways, higher rail fare income and making the DfT a “smaller, more agile” department, according to Treasury documents.