Spending Review: Key announcements for the North-East

The Chancellor used the Spending Review to boost housing, transport and flood defences but also announced a reduction in overseas aid and a public sector pay freeze.

Here are the announcements that impact the North-East:

• The North-East to benefit from over £70m in housing infrastructure funding across 8 projects, including £25m for junction improvements, land assembly and increased school capacity to unlock more than 4,000 homes in South Sunderland. This is part of the wider £7.1 billion National Home Building Fund which is investing in key infrastructure and providing support to small and medium enterprise housebuilders to unlock up to 860,000 homes across the country.
• Tees Valley Combined Authority and Tyne and Wear to receive a share of £4.2bn for intra-city transport settlements, enabling them to benefit from long-term, locally-led investment – subject to appropriate governance. This builds upon over £101m in Tees Valley and the North-East in 21/22 to improve public transport, boost connectivity and reduce congestion through the Transforming Cities Fund -with over £285m total provided to these areas over the length of the programme.
• £64m of new funding to modernise Nexus Metro in Tyne and Wear, including replacing the current fleet with 42 new air-conditioned trains and the asset renewals– improving the reliability of services, enhancing connectivity and reducing congestion.
• The North-East to benefit from strategic road upgrades such as dualling the A1 from Morpeth to Ellingham, alongside over £50 million funding for local roads maintenance in 2021/22.

The Chancellor also announced a new £4 billion Levelling Up Fund which will invest in local infrastructure that has a visible impact on people and their communities and will support economic recovery.

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Mr Sunak, MP for Richmond in North Yorkshire, said: "This has been a particularly challenging time for the people of the North-East but today’s announcements provide a blueprint for the future. 

“And the investments we are making in jobs, transport and clean energy show that we remain committed to levelling up opportunity across the region.

“We are providing billions of pounds in the fight against coronavirus across the UK, delivering the peoples’ priorities and driving the UK’s recovery.”

The Spending review also confirms £57m for 2021/22 to regenerate the SSI steelworks site; provides £20 million for the Clean Maritime Demonstration Competition which will support feasibility studies, including plans for a hydrogen refuelling port in Teesside; and £3m for a Tees Valley Hydrogen Transport Hub.

£12m of £30m total funding for the Borderlands regeneration project for 2021/22 is also being invested in the North-East to improve connectivity around and across the English-Scottish Border.

Mr Sunak added: "We have provided the British Business Bank with the resources to provide £100m in additional commitments for the Northern Powerhouse Investment Fund, to catalyse the growth of small and medium enterprises across the North, including the North-East.

"Through the Towns Fund we’re supporting the regeneration of 11 towns in the North-East, with £22m for Darlington already confirmed to boost employment skills across the town."

The North-East will also benefit from a share of the £5.2bn six-year flood and coastal defence programme, including better protection for over 1,400 properties across Wallsend, Chester-Le-Street, and Hartlepool.

The Spending Review commits to increase funding per pupil; schools in the North-East will receive almost £1.8bn in per-pupil funding through the schools block – an average per-pupil increase of 3.4 per cent compared to 2020/21. 

The government will also build four hospitals in the North-East and Yorkshire.

But Shadow chancellor Anneliese Dodds, speaking for Labour, said that “claims today around levelling up simply don’t match the evidence”.

She said: “Not a single starter home built despite almost £200 million being spent. Northern Powerhouse rail still not even approved six years after being announced. The courts modernisation programme, three years behind schedule letting victims down, up and down this country.

“People in the North more likely to have been made redundant during this crisis, holding everything else equal. Photo calls aren’t enough, we need delivery.”

Darlington MP Peter Gibson, who is "looking forward to submitting proposals for the new levelling up fund" said announcements are "great news for Darlington."

He said: “These spending plans are welcome and will absolutely continue to deliver on our levelling up agenda, particularly here in the North-East.

“The Chancellor’s Spending Review tackles this unprecedented situation head-on – ensuring lives and livelihoods in Darlington are protected and supported in the weeks and months ahead.

“At the same time, I was elected at last year’s General Election on a commitment to level up communities like ours, and I am thrilled that this Conservative Government is now making good on that promise – by delivering a once-in-a-generation investment in infrastructure that will create jobs, grow the economy and increase pride in the place we call home.”