Wolverhampton and Sheffield are the first cities selected for government regeneration funding.
The developments will generate homes on brownfield sites and cut transport times in 20 cities across England, while the full ‘Levelling Up’ strategy is due to be unveiled on Wednesday.
Housing Secretary Michael Gove pledged to deliver “Kings Cross style regeneration projects” across the country to “spread opportunity more evenly”.
The government announcement championed the development of a Wolverhampton to Walsall rail corridor, while rail plan electrification and upgrades should cut the journey from Sheffield to London to 87 minutes.
The money is coming from the £1.5 billion brownfield fund previously announced in the October Budget.
Because this doesn’t represent ‘new’ money there was cynicism from the opposition leaders, who accused the Tories of deflecting controversy around ‘partygate’ engulfing Prime Minister Boris Johnson with the news.
Labour shadow levelling up secretary Lisa Nandy said: “I don’t think Tory MPs are going to find it very reassuring when the supposed new pot of gold contains not a penny of new money.”
And Ian Blackford, Scottish National Party leader in Westminster, said: “Not only is the government trying to take the public for fools, they are also trying to take their own MPs for fools. It shows the lengths they are prepared to go to keep Boris Johnson in power. It is beyond contempt.”
Some £28 million will be allocated to the West Midlands Combined Authority and £13 million for the South Yorkshire Combined Authority to support “levelling up ambitions”.
Around 42,000 homes are expected to be delivered from the £1.5 billion brownfield fund.
Polly Neate, chief executive of Shelter, said the government needs to focus on those with low incomes.
She said: “There is little point breathing new life into an area if the local community is immediately priced out of living there. This is a great opportunity to build the genuinely affordable social homes local communities really need, and tackle the housing emergency head on.”