My noble friend the Financial Secretary to the Treasury (Lord Livermore) has today made the following written ministerial statement.
On Tuesday 17 March, the Chancellor updated Parliament on the Government’s economic plan to increase living standards, build resilience and bolster the security of the UK economy. I am today setting out more detail on a core part of that plan—how the Government will drive growth in the north of England, working alongside local leaders, as part of our wider regional growth strategy.
Today the Government have laid the “Northern Growth Strategy: Next Steps” (CP 1549). As set out in the “Northern Growth Strategy: Case for Change” (CP 1485) published in January, there is significant national benefit to boosting growth in the north. Just growing the north’s five most populous mayoral strategic authority areas’ productivity to the national average could add around £40 billion per year in gross value added, alongside around £15 billion per year in fiscal revenues. That is why the Government have put the north of England at the centre of their regional growth plans including through unlocking the northern growth corridor, stretching from York to Liverpool across the Pennines; and making the most of unique strengths in the north-east, and wider north.
The publication laid today sets out how investment in Northern Powerhouse Rail will serve as the backbone for economic transformation across the region, alongside action to grow and densify northern cities, to back industrial strategy clusters where they excel, and to decentralise our political system and put real power in the hands of local leaders. This publication begins a new phase of deeper engagement with a wide range of local partners, to further develop the northern growth strategy, with a further update intended for the autumn.
The document sets out the next steps the Government are taking now, to support their strategy, including through:
City Investment Funds
The city investment funds, announced earlier this week by the Chancellor, provide £2.3 billion of new grant, loan and patient capital funding, with up to £1.7 billion going directly to mayors of the largest city regions in the north, to unlock large-scale city centre development, in particular where there are issues around viability.
The fund will bring together different types of finance, deployed flexibly to accelerate projects, expand city-centre housing and office markets, and support major regeneration schemes across the north, including:
The Victoria North development in Manchester, one of the largest city-centre regeneration schemes in the UK
Transformation of Liverpool central gateway and sites at the Knowledge Quarter
Regeneration and densification around Leeds City station, Leeds South Bank, and the new Bradford Northern Powerhouse Rail station
Developing projects in the Don Valley corridor, Sheffield city centre innovation spine, and Rotherham town centre
Accelerating development across the proposed mayoral development zone spanning Newcastle and Gateshead, with Gateshead Quays and Forth Yards as flagship anchors.
By combining early catalytic funding with a long term focus on reinvestment, city investment funds will support sustainable growth, crowd in private capital, and help cities realise their full economic potential.
Industrial Strategy Cluster Partnerships
The Government are backing five areas in the north, supported by £150 million clusters investment from the British Business Bank, supercharging growth driving sectors where they already excel. New place based partnerships will be established with local leaders, businesses and universities to strengthen and accelerate growth in the north’s globally competitive industrial strategy clusters. For example:
Transforming Greater Manchester into a “global growth cluster” in life sciences, advanced manufacturing and digital and technologies, including through investing hundreds of millions into the development of Manchester digital campus. The campus will bring together 8,800 civil servants and Ministers in the heart of the city, solidifying Manchester’s status as a digital and AI hub, bringing more high-skilled jobs to the area, and saving the taxpayer billions through consolidating existing estate.
Strengthening Liverpool city region’s role as a leading centre for life sciences and digital technologies, including through investment in a new national cryogenics facility that will help establish the north-west as a hub for ultra-low temperature research, expected to attract investment from sectors such as quantum, healthcare and fusion; creating high-quality jobs and boosting our national security.
Supporting West Yorkshire’s financial services and professional and business services “Northern Square Mile” in Leeds, promoting it as a destination for global financial services businesses supported by the Office for Investment: Financial Services concierge service.
Working with partners to further develop the clean-energy “supercluster” across the north-east, Tees Valley, York and North Yorkshire, and the Humber. The Government will work in partnership with local leaders and businesses to attract and develop clean energy industries investment and infrastructure into the region.
Building on South Yorkshire’s strengths in advanced manufacturing and defence through its £50 million defence growth deal to strengthen sovereign manufacturing capability. This will boost the region’s strengths in the research, development and engineering of materials critical to the next generation of defence capabilities.
Fiscal Devolution
Looking ahead to the Budget, the Chancellor confirmed that she has asked Treasury officials to work with mayors and businesses to develop a road map for future fiscal devolution. This will set out plans to give regional leaders a share of the revenue from some national taxes and will consider income tax alongside other taxes. The Chancellor’s objective is to provide mayors with the long-term financial certainty that they need to invest in a way that is practical and responsible. Therefore this work will be guided by four key principles: empowerment, accountability, sustainability and fairness.
The Government will continue to develop the northern growth strategy in partnership with local stakeholders. To support this, an invitation for views is being launched alongside the document laid today. This sets out a series of questions around connectivity, regeneration and densification of cities, business investment, skills, and culture. The invitation for views will close on 31 July 2026. The Government will review responses over the summer to strengthen the approach, ahead of a further update in the autumn.
Across the north, places are demonstrating what sustained investment, strong local leadership and clear long-term direction can achieve. The challenge now is to build on that momentum and scale it up at pace. We look forward to working together with mayors and local partners on this collective endeavour over the coming months.
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