UK Chancellor Rachel Reeves has approved multibillion-pound spending on a new rail link between Manchester and Liverpool as part of a broader infrastructure investment drive, ahead of next week’s government spending review.
The project is part of a £113bn package earmarked for capital investment during this parliament. The spending is aimed at boosting regional growth, particularly outside London and the south-east.
Reeves finalised the Department for Transport’s multiyear budget on Monday, though negotiations with other departments—including housing, policing, and green energy—are still ongoing. The Treasury is also overhauling its “green book” guidelines to give more weight to projects that improve productivity in underserved areas such as the north and Midlands.
In a speech in Greater Manchester on Wednesday, Reeves is set to confirm £15.6bn in transport funding for city regions between 2027 and 2032. This includes:
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£2.5bn for Greater Manchester
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£2.1bn for West Yorkshire’s mass transit system
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£2.4bn for a new Birmingham metro extension
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£1.5bn for South Yorkshire
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£2bn for the East Midlands, including links between Derby and Nottingham
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£1.8bn for the North East, including a metro extension connecting Newcastle and Sunderland
The Manchester-Liverpool line—long championed by mayors Andy Burnham and Steve Rotheram—is expected to receive government support. The project could eventually form part of a larger northern rail network, potentially tying into any future alternative to the scrapped northern leg of HS2.
Though the full scale of the government’s financial backing is still unclear, sources suggest it will go beyond basic planning support.
Transport Secretary Heidi Alexander said the investment represents a long-overdue shift in priorities:
“For too long, people in the north and Midlands have been locked out of the investment they deserve.”
The announced funding builds on former Prime Minister Rishi Sunak’s “Network North” plan, which redirected £36bn in savings from the cancelled HS2 northern leg to regional projects—including £12bn to better connect Liverpool and Manchester.
The full details will be revealed when the government publishes its spending review on June 11, outlining departmental capital budgets for the next four years and operational budgets for the next three.
