Thursday 09 March 2017 2:17 pm

Chancellor Philip Hammond unveils Midlands Engine strategy with £392m investment and plans to cut congestion

Chancellor Philip Hammond unveiled details of his Midlands Engine plans today, including £392m through the Local Growth fund to improve transport connections.

This includes £151m for the West Midlands City region, the largest award for any area.

There are also transport and infrastructure plans to improve the Midlands, including a commitment that by 2018, all rail passengers in the Midlands will have the option to use a smart ticket on local rail services and investment in local transport improvements including £25m to tackle congestion in the Black Country.

Hammond said: "The Midlands Engine Strategy is an important milestone, setting out the concrete actions we are taking, where we are not only investing in what it does well but also tackling some of the long standing productivity barriers in the region including skills and connectivity."

There are developments in the works that should make a significant difference to the region, such as HS2 which will place the Midlands at the heart of England’s high speed rail network.

The government looked to assuage any Brexit jitters, saying it was working with businesses and local government across the region to ensure the Midlands’ interests are “fully considered”.

The region is already the headquarters for a range of big businesses including Jaguar Land Rover, JCB and Rolls-Royce and home to more than 10m people with an economy worth £217.7bn, which is 13 per cent of the UK’s annual output.

But despite its strengths, the economy has fallen behind in recent years; in 2015 the productivity gap between the Midlands and the UK average was 15 per cent.

A skill shortage, the fragmented nature of the region’s economy and a “lack of entrepreneurship and economic dynamism” were highlighted by the government as key issues that the Midlands Engine strategy would help to address.

Karl Edge, Midlands regional chairman at KPMG, said: "The statistics don’t lie: the Midlands is the real heartland of automotive and manufacturing. Further investment in regional infrastructure will improve connectivity for residents and visitors, and help to attract foreign investment and bolster our connections with the rest of the world, which will be crucial as the UK exits the EU."

Collaboration is key, and the government’s hands-on approach is reassuring, particularly at a time when uncertainty has caused some nervousness.