Money to bring forward low carbon and driverless vehicles and upgrade city transport systems was pledged today by the Chancellor of the Exchequer in his Autumn Budget.

Philip Hammond said the Government will establish a new £400M fund to roll out electric vehicle charging infrastructure and invest an extra £100M in the Plug In Car Grant.

He also committed £40M to research and development into electric charging. “Our future vehicles will be driverless,” he said. “But they’ll be electric first. And that’s a change that needs to come as soon as possible.”

In addition the Chancellor set out plans to make it possible for fully self driving cars to be on UK roads by 2021, announcing the creation of an advanced regulatory framework to allow these vehicles to be tested without a human taking control.

Transport Systems Catapult CEO Paul Campion commented: “This commitment will be key to promoting the UK as a superb test bed for new transport technologies. It will also allow UK companies to develop their own products and services to compete on the world stage.”

The National Infrastructure Commission will also launch a new innovation prize to determine how future road building should adapt to support self driving cars, supporting documents to the Budget reveal.

Philip Hammond also announced the launch of a £1.7Bn Transforming Cities Fund that will improve transport links between city centres and suburbs and promote local growth.

Half of this investment, which comes from the newly extended £31Bn National Productivity Investment Fund, will be shared by the six areas with elected ‘metro’ mayors. This includes £250M for the West Midlands to fund an extension of the Midland Metro tram system from Wednesbury to Brierley Hill in the Black Country.

National Infrastructure Commission chairman Lord Adonis welcomed the new fund. But he said “this needs to be part of a wider and longer term investment strategy, so our cities can plan for the future”.

Lord Adonis also highlighted the need for more progress to be made on plans for a new High Speed 3 line to connect cities in the north of England, and on Crossrail 2 to increase rail capacity in London.

The Chancellor stated that the Government will continue to work with Transport for London on the funding and financing of Crossrail 2.

He also acknowledged the publication of a report by the National Infrastructure Commission last week on the Cambridge-Milton Keynes-Oxford corridor, where he committed to building up to one million homes by 2050. Highway and rail infrastructure – set to include a new ‘expressway’ – will be completed to support this, he said.

Other measures announced by Philip Hammond include a £220M Clean Air Fund to support the implementation of local air quality plans. This will be funded by an increase in the first year Vehicle Excise Duty rate for diesel cars that do not meet the latest standards.

He also pledged £300M to ensure High Speed 2 infrastructure can accommodate future Northern Powerhouse and Midlands Engine rail improvements and will make £1Bn of discounted lending available to local authorities to support high value infrastructure projects.

In addition he announced £30M to trial new solutions to improve mobile and digital connectivity on trains, which will be taken forward on the trans Pennine route, and announced a new National Infrastructure Commission study on the future of freight infrastructure.

And he revealed plans for a National Retraining Scheme to focus initially on boosting digital skills and supporting the expansion of the construction sector.

Civil Engineering Contractors Association director of external affairs Marie-Claude Hemming said: “Today’s Budget shows that the Government is committed to investment in infrastructure across all areas of the UK.”

CIHT chief executive Sue Percy said: “We welcome the budget statement today which again included a number of announcements that are of significant importance to CIHT.

“We were pleased to see the transport fund for city regions and will be examining in more detail the content of this announcement.”

She added: “CIHT is working with the Government on ensuring we have the necessary skills in the sector to deliver the infrastructure outlined in previous statements. We welcome the added investment in students taking maths and further maths at A-level.”

The Government is also expected to launch its Industrial Strategy White Paper on Monday.