Reeves pledges £2.3bn to remove ‘roadblocks’ to regeneration with three-quarters of the money going to the north

Rachel Reeves has announced £2.3bn of funding for major regeneration and development projects, with the bulk of the money earmarked for regional mayors in the north of England.

Officials say the funding will give mayors the cash and tools needed to “bulldoze through roadblocks” holding up big city-centre projects and large‑scale regeneration schemes. Reeves also in her annual Mais lecture today pledged to devolve some tax-setting powers to regional leaders.

The Treasury said the City Investment Funds announced today will provide a total of £2.3bn made up of new grant, loan and patient capital funding.

Three quarters of the funding - £1.7bn - will be focused on projects and areas in cities in the ‘northern growth corridor’, including Leeds South Bank, Liverpool Central, Manchester Victoria North, Newcastle and Gateshead Quays, and Sheffield City Centre and Innovation Spine (see box below).  

The £2.3bn is made up of £1.5bn through the government’s Housing Acceleration Fund and £800m through its City Densification Fund.

A Treasury spokesperson said the funding will speed up regeneration schemes, “from housing and offices to transport-linked developments that will create jobs and unlock growth”

The funds are designed to attract larger sums from private investors.

Reeves, in her annual Mais Lecture in London, also said she has asked officials to develop a “roadmap” for fiscal devolution to the regions, to be published alongside the Budget in the autumn.

She said: “This will set out plans to give regional leaders control of a share of some national taxes which have, for too long, been allocated by central government.”

“They [officials] will look at income tax, alongside other taxes, with reforms initially targeted at those places that have the greatest capacity to deliver them, and the greatest potential to benefit.” Reeves said the reforms would be cost neutral.

Reeves said: “I want every part of Britain to do well. That’s why we’re going for growth all across the country, not just in a few places, because I want everyone to be able to succeed no matter what their parents do, where they grow up, or where they choose to settle down.

“Our economic plan is the right one. By bringing back stability in our public finances, boosting investment in our infrastructure and driving reform, we’re building a stronger more secure economy.”

The announcements were welcomed by the Northern Housing Consortium (NHC), which represents social housing providers.

Patrick Murray, executive director (policy and external relations) at NHC, said: “Our research identified there is capacity for 320,000 new homes on brownfield land in the North, and this announcement will help make some of those new homes a reality.

“We particularly welcome devolution of the funding to Strategic Mayoral Combined Authorities. They are best placed to use local knowledge to develop solutions to take forward these schemes, and to deliver real change for their communities. The NHC has consistently highlighted that ‘one size fits all’ centralised funding pots do not meet the diverse needs of northern communities.”

The announcements follow the government’s £45bn Northern Powerhouse rail announcement in January.

The Treasury also announced today that Reeves would be doubling funding for the ‘OxCam corridor’, with up to £800 million now available for buying new land and building infrastructure to kickstart development of homes, laboratories and workspaces, 

Reeves also announced a goal of ”making the UK the fastest adopter of AI in the G7”. She announced new cross‑economy “sandboxing” powers to test innovations in live markets, a new £500m sovereign AI unit to help British firms scale up and £2bn for quantum computing. She also announced she is setting up a new AI Economics Institute to work with the Future of Work Unit to understand the impact of AI on jobs and productivity.