UK Budget devolution plans will give England’s mayors and regional leaders greater powers and funding, including a new 1.5 billion pound borrowing facility to be designed with mayors over the next two years.
The facility builds on Prime Minister Andy Burnham’s argument that local leaders should no longer have to go cap in hand to Westminster, according to a daily briefing on the Budget. The government has allocated an initial 285 million pounds next year, with the move intended to shift away from reliance on different bidding pots managed from Whitehall.
Chancellor John Healey said his plan would make the most of untapped and wasted potential in English cities and regions, according to the Gazette. The announcement will be formally made in Wednesday’s Budget.
More flexibility for local leaders
The plans will give mayors more flexibility and authority to make investment decisions, according to reports. Burnham, who has long called for greater devolution from Whitehall, said the move would stop local leaders having to beg Westminster for investment.
A Treasury spokesman framed the shift as part of the government’s growth argument: devolved spending power and housebuilding, alongside more than 1 billion pounds extra for social and affordable housing, taking the 10-year housing programme past 40 billion pounds.
Why it matters beyond the Budget
The devolution push comes as Healey delivers his first Budget under Burnham’s Labour government, with pressure to fund defence and address the cost of living, according to Inside Housing. The Prime Minister has also said local leaders in England will get the power to introduce a tourist tax on overnight stays, and has confirmed tax cuts on energy bills.
Whether the borrowing facility delivers real freedom will depend on its design. The facility is to be designed with mayors over the next two years, and local leaders will judge it on whether it genuinely replaces Whitehall bidding pots or simply adds another one. For now, the signal from Downing Street is clear: growth, ministers argue, will come from cities and regions given the tools to invest for themselves.
For mayors, the test will be delivery: whether the new facility funds homes, transport and skills at the pace local economies need, or whether Whitehall retains control through the design process. The next two years of negotiation will answer that question, and voters in England’s city regions will judge the result.
