BUDGET | Chancellor grants £377m to region through Transforming Cities Fund

“If we are truly to build an economy that is fit for the future, then we have to get all parts of the UK firing on all cylinders,” Hammond said, allocating £377m from a £1.7bn pot aimed at supporting intra-city transport objectives, which local developers have criticised as “a drop in the ocean”.

The money is part of the five-year National Productivity Infrastructure Fund, announced by the Chancellor of the Exchequer in his Spring Budget earlier this year. As part of today’s Budget, Hammond increased the £23bn NPIF to £31bn, and extended it by a further year.

Of the £1.7bn, half is being allocated on a per capita basis to the six combined authorities with elected Metro Mayors. West Midlands secured the biggest allocation of £250m, followed by Greater Manchester at £243m. Liverpool City Region was allocated £134m.

The remaining money will be available for other locations in England to bid for.

The funds will be used to target projects which drive productivity by “improving connectivity, reducing congestion and utilising new mobility services and technology”.

The Budget said that in addition to the Transforming Cities Fund, the Government “will continue to work with Transport for Greater Manchester to explore options for the future beyond the Fund, including land value capture” and work in partnership to develop a local Industrial Strategy.

A £12m fund for 2018-19, and 2019-20, was made available for the Mayoral Combined Authorities, “to boost the mayors’ capacity and resources”.

Overall, references to the Northern Powerhouse were light in Hammond’s speech, especially when compared to his predecessor, George Osborne, former MP for Tatton.

New funds for regional projects were thin on the ground, with the Chancellor recycling many announcements already made, including the £300m for infrastructure associated with Northern Powerhouse Rail.

However, the Government did specify it would provide £4m to Jodrell Bank, subject to the approval of a sustainable business case, as part of a £20.5m project to create a new interpretation centre promoting the scientific work undertaken at the Cheshire site.

On the topic of further devolution to the Liverpool City Region, the Budget kept commitments vague: “The Government will enter into discussions with the Liverpool City Region and Tees Valley to explore scope for further devolution to these areas, to promote local growth.”


Daniel Hynd, managing director of Promenade Estates, said: “People are saying that this was a budget for the development sector but there was far too little for regional economies. £134m for Liverpool for transport initiatives, whilst welcome, is a drop in the ocean.

“The disparity between London and the regional economies demanded a full-throated response, and what we got was a mildly embarrassed cough.

“Building more houses is of little use if there aren’t the quality, high-paying jobs to pay people’s rent and mortgages. There was nothing meaningful around regional economic development and, when you have councils reluctant to offer head leases or rental guarantees, the speculative development of the quality office stock needed to attract big business in to the region simply won’t happen.

“It was a bit of a missed opportunity from a regional perspective.”

John Keyes, international partner and head of Cushman & Wakefield’s Manchester office, said:

“In Greater Manchester, there is a sense of a long term plan, but despite devolution, the city region and wider North West is still heavily influenced by decisions made in London and we still need Government support and money to deliver the vision.

“The award of £243 million to Greater Manchester from the Transforming Cities Fund for more local transport improvements should help productivity and support new housing development across the city region.

“The City Region with its universities, research base and growing technology businesses should also see benefit from increases in the National Productivity Investment Fund.

“The quality of the public-private partnerships in Greater Manchester and the relative stability of our politics and governance mean that we are still the best placed of all city regions to deliver economic growth through an effective and joined up strategy.  The Budget has given us some new initiatives and some new money but the economic context looks certain to remain challenging.”

Ian Fletcher, director of real estate policy, British Property Federation: “Poor connectivity between cities, particularly in the north of England, is a huge barrier to growth and is a constant complaint of businesses and investors in the region. The £1.7bn Transforming Cities Fund is a significant sum and provides real opportunity for Metro Mayors not only to invest in transport projects in their own regions, but also to work together for the benefit of greater investment and productivity.

“It’s good to see that the National Infrastructure Commission will be focusing on freight, particularly given the concerning comments in the draft National Infrastructure Assessment that there is limited opportunity to move more freight from road to rail. The urban logistics sector is in a period of huge growth and any focus needs also to consider the impact on planning and air quality policies.”

“Government working with Greater Manchester on a local Industrial Strategy is likely a thing of signs to come, and it will be interesting to see to what extent this deviates from the national version – and whether there will be scope for local, or regional, sector deals.”

Adrian Kemp, director at professional services and engineering consultancy, WSP, which employs more than 900 staff in Manchester, said: “The allocation of £243m for Greater Manchester through the new Transformational Cities Fund is great news, but I hope that Transport for the North, which received statutory powers last week, will also be allocated specific funds to invest in creating an integrated infrastructure network across the North.”

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