By Andy Bruce MANCHESTER, England (Reuters) -British finance minister Rachel Reeves will on Wednesday commit 15.6 billion pounds ($21.1 billion) of funds for transport projects in cities outside
UK's Rachel Reeves Unveils £15.6 Billion for Transport Projects Outside London
By Andy Bruce
MANCHESTER, England (Reuters) -British finance minister Rachel Reeves committed 15.6 billion pounds ($21.1 billion) on Wednesday towards transport projects in cities outside London that have long suffered from underinvestment.
In a speech in Rochdale, northwest England, Reeves announced the first investment commitments from her June 11 Spending Review, which will set budgets for government departments until 2029.
Prime Minister Keir Starmer's Labour government, which suffered heavy defeats in local elections this year, is under pressure to show it is delivering improvements to public services and infrastructure.
British cities outside the capital suffer a bigger shortfall in productivity compared with their counterparts in other countries, with outdated and limited transport links identified by organisations like the OECD as a key factor.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.
She added that a previous focus on prioritising public infrastructure investment in areas that would deliver the most reliable financial returns had led to growth being supported 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, which 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 central government.
TOUGH CHOICES
Wednesday's announcement represents a budget commitment to fund transport projects between 2027/28 and 2031/32.
They include investments in local public transport in the West Midlands, Greater Manchester, northeast England and South Yorkshire, as well as a first mass transit system for West Yorkshire - an urban region of 2.3 million people.
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 this review could be "one of the most significant domestic policy events" for the Labour government, with tough choices between healthcare, defence and other areas of spending.
Amid reports of tensions within the government, Reeves said she had turned down promising proposals from her ministerial colleagues due to budget constraints.
"There are good things I have had to say 'no' to. The reason for that is because it is important to have control of the public finances," Reeves said.
Police spending would increase, she added, without giving details.
($1 = 0.7398 pounds)
(Additional reporting by David Milliken and Muvija M in London; Editing by Mark Potter and Aidan Lewis)
