City Densification Fund: Place selection and allocation methodology
Published 19 March 2026
Applies to England
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Tier of delivery
Funding is delivered through Mayoral Strategic Authorities (MSAs) who have the strategic remit to identify regional opportunities aligned to national growth priorities.
Strategic Place Selection
To ensure the City Densification Fund achieves its policy aims, place selection has identified those places with high growth potential and scope for productivity catch-up, as well as the necessary capabilities to unlock project pipelines at scale for onward investment.
This was assessed in 2 phases.
Phase 1: A quantitative analysis of productivity to identify places with growth potential
This step identified less productive regional economies that have scope to grow quickly by ‘catching up’ to more productive economies through assessing gross domestic product (GDP) per head (ONS data) to measure distance from UK average productivity.
All current MSAs with below UK average GDP per head in current market prices in the most recent 2023 release were considered in scope for funding.
Phase 2: A qualitative assessment to ensure the fund can be deployed effectively
This step identified the places with the funding environment and governance needed to structure integrated grant and repayable products, sequence interventions across the project lifecycle, and crowd in additional capital.
It focused on 3 factors:
Financial architecture
The Integrated Settlement provides the stable, multiyear framework required to prioritise and structure interventions and to adapt investment approaches to local conditions.
Funding landscape
Operating within a broader devolved funding ecosystem—including access to the Mayoral Revolving Growth Fund—enables places to combine grant and repayable products to unlock complex, productivity enhancing projects.
Capabilities
Formal assessments to confirm strategic capability (through agreed Local Growth Plan priorities aligned with national objectives) and financial and risk management capability (through Integrated Settlement readiness and MRGF assessments).
According to these requirements, Established Mayoral Strategic Authorities in the North and Midlands with an Integrated settlement have been identified as meeting the criteria for the City Densification Fund.
As such the 6 MSAs eligible are:
- Greater Manchester Combined Authority
- Liverpool City Region Combined Authority
- North East Combined Authority
- South Yorkshire Combined Authority
- West Midlands Combined Authority
- West Yorkshire Combined Authority
Funding allocation
The Fund will be allocated across the 6 eligible MSAs in proportion to their population and rounded to the nearest £5 million. The population estimates for the UK, England, Wales, Scotland and Northern Ireland: mid-2024 were downloaded at MSA geography via Nomis.
Each MSA’s percentage of the total population across the 6 eligible MSAs is then calculated and the total funding is allocated in proportion to the calculated percentage and rounded to the nearest £5 million.
The total final allocations (rounded to nearest £5 million) for each MSA are:
| MSA | Allocation (£) |
|---|---|
| West Midlands | £180 million |
| Greater Manchester | £175 million |
| West Yorkshire | £145 million |
| North East | £120 million |
| Liverpool City Region | £95 million |
| South Yorkshire | £85 million |