An initial £400m of funding will be used in Cambridge to support affordable home delivery as well as infrastructure construction and business expansion.

In Oxford, the Cowley Branch railway line will reopen with new stations to improve connectivity and transport links in the area.

This funding has been made available after the Ellison Institute of Technology recently announced a £10bn expansion of its Oxford base over the next decade, creating 7,000 jobs.

“We have massive ambitions for the Oxford-Cambridge corridor, that’s why we’re reopening the Cowley Branch railway 60 years after it closed, why we’re building more affordable housing and investing in business, and how we’ve been able to unlock £10bn in private investment,” said chancellor Rachel Reeves.

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“By choosing investment and renewal over chaos and decline, we’re boosting growth and building an economy that works for working people.”

The news has been welcomed, with Colin Brown — head of planning and development at Carter Jonas — saying the investment was needed after the Hartree Project in Cambridge was delayed this year due to sewage relocation concerns.

“This funding will help unlock the high-quality development the city aspires to — development that must be underpinned by significant investment in affordable housing, infrastructure, and sustainable transport,” said Colin.

“In particular, we need urgent action to address constraints such as water scarcity and sewage capacity, alongside a strong focus on delivering high-quality public transport to support inclusive and sustainable growth.”