Money from shale gas could fund northern England transport infrastructure - Osborne

The Chancellor George Osborne has held out the prospect of ring-fencing funds raised from shale gas extraction in northern England for transport and other capital spending.

Osborne told the BBC yesterday that he did not want the money from shale gas, which he suggested would particularly be extracted in the north, to be "squandered on day-to-day spending," but instead wanted it to be "invested in the economic future" of northern England. It would be achieved by placing the funds in a sovereign wealth fund established for the purpose.

He also revealed that he was in discussions with councils in the Greater Birmingham and West Yorkshire conurbations about devolving budgets and powers to them in return for them accepting elected mayors, similar to the deal he did this week with Greater Manchester's councils - and was open to other councils coming forward.