George Osborne and Danny Alexander
UK Chancellor of the Exchequer George Osborne and Chief Secretary to the Treasury Danny AlexanderReuters

The government will invest more than £7bn in the north of England to create a "Northern Powerhouse".

The chancellor, as part of his 2014 Autumn Statement, made the commitment after noting that economic analysis of urban growth in recent decades has highlighted three key themes: the importance of great cities linking together, a knowledge-based economy and strong civic leadership.

The government, with Transport for the North, will produce a comprehensive transport strategy for the north.

The plan includes options, costs and a delivery timetable for a HS3 east-west rail connection, with an interim report in March 2015.

The Treasury also said it is analysing the possibility of accelerating construction of the HS2 Phase 2 route from north of Birmingham to Crewe, in order to bring the benefits of HS2 to the north sooner. This will be subject to decisions on Phase 2 in 2015.

Osborne also announce that the government is to commit to a "transformative" package of more than £6bn ($9.4bn, €7.6bn) of investment in the northern road network.

Cities including Sheffield, Newcastle, Hull, Sunderland, Leeds, Manchester and Liverpool will benefit from the investment.

Elsewhere, the chancellor said the "Northern Powerhouse" package of measures also seeks to cement the north as a world leader in science and technology.

A part of the initiative the government will invest £235m in a new Sir Henry Royce Institute for advanced materials research and innovation, which will be based in Manchester and have satellites in cities including Leeds, Liverpool and Sheffield.

In addition, and among other things, the government will help build a £113m Cognitive Computing Research Centre in Daresbury, Warrington.

Osborne also unveiled last month that Greater Manchester will get a new directly elected Mayor.

The Treasury said other city areas have since come forward with devolution proposals, which are being discussed.

There are also proposals to form further combined authorities and improve cooperation between local authorities in a number of urban areas.

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