The Government’s promises to invest in tech and transport have been welcomed by North West business leaders.
Rachel Reeves used her spending review to announce big boosts for spending on innovation, housing and defence.
She also reiterated her recent announcements on transport funding, including £4.1 billion in local transport funding for the North West. And she said the Government would “take forward our ambitions” for Northern Powerhouse Rail (NPR), the planned new high-speed line from Liverpool to Manchester and beyond.
Ms Reeves said universities and high-tech industries would get a boost in research and development, with it rising to £22 billion per year by the end of the spending review. Meanwhile, £2bn will go to an AI action plan to support “home-grown AI”.
The speech also included a commitment to change the Treasury’s “green book” rules that govern whether major projects are approved, a move which could boost investment in the regions of England.
Katie Gallagher, MD of Manchester Digital and chair of the Ƶ Tech Cluster Group, said: “The Manchester tech industry welcomes the news that the Government has committed £86bn into science and technology R&D, including up to £500m for regional authorities to target investment locally and £2bn for the AI Action Plan. Greater Manchester will receive awards of least £30m, as well as a £4.8m partnership between Manchester and Cambridge for business investment.
“We also recognise the significance of the funding to reform public services and the opportunities this could create for SMEs in terms of procurement, if done correctly, as well as the £1.2bn announced for skills and training for young people, which will be vital to the development of our tech, digital and science industries.
“We’ve campaigned and worked closely with MPs and officials to push for greater regional investment. As ecosystem organisations, we see first-hand where support is needed and where it can have the most impact. Giving local leaders the means to invest in R&D, skills and digital infrastructure will only deliver results if they are working hand-in-hand with the right partners, including cluster organisations like ours, who understand the businesses, the gaps and the opportunities on the ground.
“This isn’t just about growing the tech sector. It’s about creating the conditions for people across our cities and regions to benefit from high-value, future-facing jobs. If we get this right, the returns will go far beyond GDP.”
Colin Sinclair, chief executive of Knowledge Quarter Liverpool, said: "Liverpool is already home to a world-leading cluster of health and life sciences innovation, so the announcement that we will receive a share of the £22bn annual investment into regional science and tech clusters is music to the ears of those within our city region who recognise its potential for significant future growth and the enormous economic and social impact these industries can have on our communities.
"There are major opportunities here to expand on specialisms such as materials chemistry, vaccine development and pandemic preparedness to create innovation super clusters through even greater collaboration through the quadruple helix partners from academia, the public sector, the private sector and the local community.
"We must also hope that the funding support for the new Liverpool-Manchester rail line not only heralds the start of a generational transport project that will better connect Liverpool with the rest of the country, but it also signals a shift towards greater capital investment in the North, underpinned by the government's plans to review the Green Book approach and have a broader, more considered approach to public investment decisions in years to come."
Praetura Ventures: Statement will support North West tech success
VC firm Praetura Ventures deploys the NW equity arm of the British Business Bank’s Northern Powerhouse Investment Fund.
Louise Chapman, investment director and NPIF II fund principal at Praetura, said: “The government’s commitment to dedicate a £410m Local Innovation Partnerships Fund for regional authorities is incredibly encouraging for founders and investors in the North of England, who’ve spent years building and backing innovative businesses. These businesses are cementing the positions of regional cities on the world stage, particularly in fields such as AI, cybersecurity and healthcare.
“Expanding the capacity of the British Business Bank will also help accelerate this growth. We’ve seen first-hand the impact that regionally-focused funding can have, and founders have been emboldened by initiatives such as the Northern Powerhouse Investment Fund II.
“The North’s regions stand shoulder to shoulder with other parts of the Ƶ and Europe – our knowledge assets and spin out businesses have been world-leading for decades – and major developments like the new Sister district in Manchester and the strength of established bases such as Alderley Park and Sci-Tech Daresbury are giving start-ups the platform to thrive. It’s also encouraging to see the government’s commitment to the North in its programme of capital investment in infrastructure, which will drive growth around the support, capital, talent and technology needed to build exceptional companies locally.”
Meanwhile Louis Taylor, CEO, British Business Bank, said: “As the public financial institution with responsibility for supporting the growth of smaller businesses across the Ƶ, the British Business Bank will play a critical role in delivering the Ƶ’s upcoming modern Industrial Strategy.
“We welcome today’s announcement by the Government, which is a strong endorsement of the British Business Bank’s 10-year track record, market access and capabilities, including our position as the largest investor in Ƶ venture and venture growth capital funds and the most active late-stage investor in Ƶ life sciences and deeptech.
“To deliver the Government’s growth mission it is critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located.”
Chamber welcomes transport boost and ‘Green book’ changes
Paul Cherpeau, chief executive of Liverpool Chamber, said: “Businesses in the Liverpool City Region recognise that better transport can help them to power their growth plans through easier movement of people and goods in all directions.
“The proposed Liverpool-Manchester rail line, combined with further investment in the Transpennine route, offers an excellent opportunity to maximise connectivity across the North West if it better connects our key strategic transport assets, including Liverpool John Lennon Airport. That enhanced connectivity can also boost our attractiveness as an investment destination. We have long-standing challenges with regards to movement of freight, particularly on the West Coast mainline, so the plans must seek to address those issues and improve access to and from other Ƶ cities such as Birmingham.
“Ten years after the promise of Northern Powerhouse Rail, then the subsequent failed High Speed Rail plans, there is understandable scepticism that projects can be announced and then dropped. Learning the lessons of HS2, it’s important to ensure local engagement and leadership is at the heart of the projects, supporting engagement with supply chain and the workforce.
“The revised 'Green Book' methodology is a welcome step towards expanded government investment outside the South East and a more authentic understanding of value for money. The Chamber looks forward to working with our public sector partners, transport operators and member businesses to ensure the economic benefits to our city region are fully realised through these transport and infrastructure projects.”
£39bn housing cash shows Government bid to tackle housing crisis
Tim Heatley, co-founder of social impact developer, Capital&Centric and chair of the Greater Manchester Mayor’s Charity, welcomed the Chancellor's commitments on housing, including her pledge to invest £39 billion over the next decade in social and affordable homes in England.
He said: "This is a welcome move and shows real intent from government to get to grips with the housing crisis. Scrapping the Vagrancy Act, investing in affordable homes, and prioritising prevention are all steps in the right direction. But this should be the start of the journey, not the destination.
“We need to keep pushing for long-term solutions that truly break the cycle of homelessness – that means getting people off the streets and into permanent, high-quality homes with the support they need to rebuild.
“The Mortgage Guarantee Scheme will help more first-time buyers get on the ladder, but my concern is that without boosting supply at the same pace, it risks just fuelling demand and pushing up prices. If this is paired with genuine delivery of new homes in the places people actually want to live, then it can be a powerful catalyst for change.”
'Concerns remain' for Greater Manchester despite positive news
Subrahmaniam Krishnan-Harihara, of Greater Manchester Chamber of Commerce, hailed the Chancellor's transport announcements. He said: "Taken at face value, today’s announcements put some key ingredients for securing economic growth on the table. For Greater Manchester, however, many concerns remain.
"Firstly, the actual increases in allocations are marginal even if the headline amounts seem substantial. For example, the £39 billion for housing is over a period of 10 years and the actual increase in social housing spend goes up only by 0.3%. Then, there is the issue of whether the promises are deliverable.
"Earlier in the year, the Office for Budget Responsibility (OBR) estimated that Chancellor only had £9.9 billion in fiscal headroom against her fiscal rules, which mandate balancing day-to-day spending with tax revenue and reducing debt as a share of GDP by 2029/30. Ten-year gilt yields have also recently increased imposing higher borrowing costs even as borrowing itself increased more than expected in April.
"Notwithstanding more than expected growth in Ƶ GDP so far in 2025, the IFS and other commentators have warned that the Chancellor may have to either reset her fiscal rules or raise more revenues, and taxes are likely to go up when the Chancellor comes back this autumn to deliver the Budget. The Chancellor may even have set the scene for tax rises: by her own admission today, the CSR’s ambitious spending was made possible by the October 2024 tax rises, hinting at attempts to raise more revenue via tax rises."
Mr Krishnan-Harihara said we also need to wait and see whether there would be "a sincere effort to address regional economic imbalances".
He said: "The Comprehensive Spending Review (CSR)does indeed allocate funds, primarily for transportation with £15.6 billion for transport projects outside of London and poverty alleviation (funds for the most deprived areas in the country). However, there were even more significant commitments to London and the wider South East: £14 billion for Sizewell C and a four-year settlement for Transport for London.
"Some commentators have called for the £86 billion of scientific research and development funding to be equitably distributed ensuring that the “golden triangle” of Cambridge, Oxford and London do not monopolise the Ƶ’s scientific research and development. Although there is interest in strengthening Manchester’s partnership with the “golden triangle”, the £4.8 million allocated for this ambition is, at best, tokenistic. Although the Treasury is revising its Green Book and key CSR measures indicate an attempt to reach out to less prosperous locations in Labour’s heartlands in the Midlands and the North of England, the funding pot is hardly adequate to address historic underinvestment in areas outside of London.
"Ultimately, success depends on execution. Universities, colleges and local authorities in the North need support and grants, not opportunities to make competitive bids against one another. Businesses need certainty and households require protection from further tax rises and unexpected increases to the cost of living. If economic conditions improve and private investment increases, the Chancellor’s may have a less difficult path ahead. If not, there may be more years of under delivery and broken promises. "
Legal boss: Transport boost welcome but Government must look at Legal Aid
Alison Lobb, managing partner at Morecrofts Solicitors, said: “This has been a challenging period for many business owners, with a swathe of cost pressures impacting on their ability to plan ahead effectively. Hopefully today’s spending pledges signal the beginning of a more positive period of investment in major projects to kickstart economic growth, both regionally and nationally.
“As a business with multiple offices across the city region, we welcome investment in local transport infrastructure that better connects the area and makes travel more accessible for our clients, staff and professional peers, while also creating opportunities for local communities.
“In the coming months, we would like to see more investment in civil Legal Aid, specifically for separating families to reduce costly and stressful court battles, and survivors and the accused in family law cases involving abuse allegations, to ensure everyone has access to family, community care and mental health support, while also reducing the strain on local public services.”
Sutcliffe chief warns of planning and construction delays
Sean Keyes, CEO at Liverpool-based civil and structural engineering consultancy Sutcliffe, said: said “Following the Spending Review, it’s evident that planning delays, escalating costs, and ongoing labour shortages continue to hinder progress across the Ƶ construction industry. While infrastructure investment has been promised today, the lack of clarity around long-term delivery is causing widespread hesitation—putting the government’s 1.5 million homes target at real risk.
"Nevertheless, Rachel Reeves’ £40bn pledge of grants and commitment to affordable housing is a bold and encouraging step. Doubling investment signals serious intent to tackle the housing shortage and support communities. There's no denying that it's a major boost for the sector, however the approach must go further: either by ensuring local authorities and developers can turn funding into real homes or setting out a new, realistic pipeline underpinned by a clear placemaking framework—something Homes England has long championed.
"The industry urgently needs certainty and sustained commitment. While Labour’s plans are ambitious, questions remain over whether the party can stay the course amid mounting political pressure on spending. And while the direction is promising, whether the government hits its 1.5m homes target remains uncertain and will likely go down to the wire.”
Call for Government to ‘back the builders’
Patrick Hickey, director of property development consultancy, Make NW, said: “While Tony Blair prioritised education, with this Spending Review, the Chancellor has made it clear that her main priorities for this government are to: invest, invest, invest and build, build, build.
“It’s important to recognise that this is the first ‘invest-to-save’ multi-year Spending Review, Britain has seen since 2007 – almost two decades ago when Chancellor Alistair Darling promised the government will borrow only to invest, and not to fund current spending.
“This is a build-to-save Spending Review.
“By announcing £113bn of new capital investment, and only increasing day-to-day spending by 1.3%, the Chancellor is signalling that now is the time to back the builders to construct the next generation of housing, infrastructure and property and defence assets which Britain desperately needs.
“The government's new affordable housing programme is a positive signal — but the effectiveness of the grant will depend entirely on how it's applied on the ground.
“Now we are also keen to find out more about the detail of how this funding will be delivered. How is the new AHP funding going to be split between social rent, affordable and shared ownership? Will funding for the AHP be front loaded to help kick-start delivery of more homes in this Parliament to help meet the government’s ambitious housing targets?"
Public and private sectors must now work together to boost North West
Barry Crichton, managing director, Manchester at Avison Young Ƶ, said: “With targeted investment across transport, housing and infrastructure, the prospects set out in today’s Spending Review bode well for growth in regional markets like Greater Manchester.
“The £15bn national commitment to improving city-region transport across the country, announced last week, is a particularly encouraging step. The £2.5bn earmarked for tram extensions in Greater Manchester will be transformational, further strengthening connections to growing business hubs such as Stockport, and confirmation of the plan for the Liverpool-Manchester Railway represents a major step forward in addressing the historic imbalance in infrastructure investment across the Ƶ.
“For too long, transport projects outside of London have been undervalued. This funding is not just a boost for connectivity, but will open the door to further investment, greater mobility for the people who live and work here, and create a more resilient regional economy, on the basis of long-term, place-based value.
“When investment in transport is aligned with housing, it creates the kind of long-term ecosystem that is needed for our region to prosper. The past two decades have seen Manchester experience huge transformation, which has led to significant growth in the city region’s job market and population. This in turn has resulted in unprecedented demand for housing, with the private rental sector now representing most of Manchester’s housing market.
“That’s why I am encouraged to see a continued focus on housing, with £39bn committed to affordable and social housing. Today’s Spending Review lays a promising foundation, and I look forward to seeing the opportunities it creates for Greater Manchester, but we mustn’t get swept away by promises – the region’s public and private sectors need to work together to ensure these opportunities come to fruition.”
Affordable homes boost welcomed by social landlord
Paul Dolan, chief executive of Liverpool-based social housing provider Riverside, said: “This is a historic and ground-breaking funding settlement for social landlords, one that was desperately needed and will give Riverside and the wider sector greater certainty over funding throughout the next decade.
“We are pleased to see that the Chancellor has agreed a ten-year index-linked rent settlement. Rent certainty is critical for us to be able to invest in our homes and services, now and into the future.
“The Affordable Homes Programme (AHP) marks a major step in boosting the amount of social housing which is crucial if we are to cut the record number of homeless families living in temporary accommodation.
“We hope to see dedicated funding for urban regeneration play a significant part in the Affordable Homes Programme. As an organisation, we have seen first-hand the difference regeneration makes in improving the quality of homes, neighbourhoods and the health and economic prospects of residents. With one in every six children living in an overcrowded home, dedicated regeneration funding can transform communities up and down the country."
Dave Seed, managing director at North West property management firm Qube Residential, added: “While the outlook remains uncertain, targeted infrastructure investment and progress towards the proposed 1.5 million new homes could open up areas of growth. We remain committed to helping landlords navigate an increasingly volatile market—one that faces yet another shift, despite earlier assurances from Keir Starmer that there would be no additional budget announcements.
“That said, allowing social landlords to raise rents 1% above inflation is a sensible move. It reflects economic reality, supports long-term viability, and gives landlords confidence to invest in building and maintaining homes.”
