Multi billion rail investment for North of England

The Chancellor, the Rt Hon Rachel Reeves MP, has announced a ‘New Growth Plan for the North’, which sets out proposals to develop the economy across the north of England, including investment in new rail infrastructure such as Northern Powerhouse Rail (NPR).

The unveiling of the Northern Powerhouse Rail programme marks a landmark shift in government commitment to addressing the infrastructure deficit that has long constrained economic growth in the North of England. Announced on 14 January 2026, these measures form the core of the new Northern Growth Strategy. The strategy places a strong emphasis on transport connectivity as a catalyst for raising productivity and prosperity across cities including Liverpool, Manchester, Leeds, Bradford, Sheffield, York, Newcastle, and Hull.

At the heart of this strategy is an unprecedented £45 billion financial envelope allocated to deliver the most substantial travel upgrade in the region for a generation. The initial stage, supported by £1.1 billion over the current Spending Review period, will advance planning and development, enabling procurement opportunities from early-stage consultancy and design through to infrastructure delivery. Mainline upgrades and new routes will ensure rapid, frequent, and reliable rail services between key urban centres, reducing journey times that currently lag behind southern comparators and boosting the competitive positioning of northern city regions.

The first phase will see immediate upgrades between Sheffield, Leeds, York, and Bradford, with work advancing on the long-awaited Leamside Line to Newcastle. Subsequent phases will focus on connecting Liverpool and Manchester, including a new route via Manchester Airport and Warrington, and further upgrades linking major centres across the Pennines. This improved connectivity will not only facilitate the daily movement of people but also underpin urban regeneration and housing growth, particularly in station-adjacent districts. The regeneration of stations such as those in Leeds, Bradford, and York will support significant new housing and commercial development, providing multiple entry points for supply chain partners and specialist subcontractors.

In parallel, the government’s investment dovetails with broader economic development initiatives. The allocation of £570 million for college and skills infrastructure supports the development of a workforce capable of meeting the complex skills requirements of major rail and construction programmes. It reflects a coordinated approach to resolving local skills gaps by collaborating with employers, local leaders, and education providers – a factor that will benefit firms with an interest in workforce pipeline development and local training partnerships.

Regional city regions, such as Greater Manchester and West Yorkshire, are positioned as critical ecosystems for sectors ranging from advanced manufacturing, financial services, and digital technologies, to clean energy and life sciences. The planned rail upgrades are expected to catalyse the further growth of these clusters by improving access to talent, customer bases, and logistics networks. The potential upside, if regional productivity reaches the national average, is estimated at an additional £40 billion per annum for the UK economy -underscoring the attractiveness of the North as an investment location for both domestic and international suppliers.

The government’s approach will also avoid replicating past pitfalls witnessed with major projects like HS2, committing to robust cost controls, streamlined planning, and design optimisation in close partnership with local authorities. Construction and engineering contractors, technology suppliers, and urban regeneration specialists will find a robust pipeline of demand emerging across transport, housing, and energy as the Northern Powerhouse Rail programme and its associated regional initiatives move from planning to implementation.

Against the backdrop of additional £15 billion investments in city region transport, expansion of Heathrow, and ongoing East Coast Mainline upgrades, this policy represents a comprehensive platform for companies seeking to expand or enter the UK’s northern infrastructure market. The scale of investment and broad stakeholder partnership underpinning this initiative attest to a fundamental political and economic realignment, providing a clear framework for businesses to engage across procurement, supply, and skills development in the delivery of the North’s renewed connectivity.

Reacting to the Plan, RIA Chief Executive Darren Caplan said: “Today’s announcement is a significant declaration of intent from the Government on future rail investment in the North, that Northern Powerhouse Rail (NPR) will now be initiated.

“Both rail suppliers and users will welcome any plans to improve connectivity between Leeds, Sheffield and Bradford and options for electrifying those routes, as well as ambitions for a new line between Liverpool and Manchester via Warrington and Manchester Airport.

“RIA is also pleased that a north-south railway along the lines of the original HS2 Birmingham to Manchester route will eventually link to NPR. With the West, Midland, and East Coast main lines all filling to capacity, we have always said that to get the full benefits of HS2 you need to build the full scheme. Whatever the scheme is eventually called, bringing Manchester and Leeds back into play via both NPR and extension to HS2 is crucial to deliver the economic growth and connectivity the UK needs in the years ahead.

“RIA and our members now ask to see detailed plans, timescales and committed budgets to all three phases of the Government’s plans, in order to ensure that this statement of intent announced today becomes a reality well within its 2040s deadline.”

If you would like to read more stories like this, then please click here