He improves City hugely, as would Mendy, but by far the biggest cost driver in this will be the fact he's English. We only have 17 foreign spaces in the squad.
Ederson, Bravo (2)
Otamendi, Kompany, Kolarov (3)
Gundogan, De Bruyne, Fernandinho, Silva, Silva, Sane, Fernandinho, Yaya (8)
Jesus, Aguero (2)
That's 15 already, and doesn't include players we are yet to sell like Nolito, Nasri, Fernando. Etc.
Add Mendy and your at 16 with one spot left and heavily chasing Sanchez. If overpaying £15m for Walker leads to you ending up with another Sanchez type player in the squad then that's a small price to pay. It's the same reason we are probably chasing Bertrand as well.