Prime Minister Andy Burnham said the changes would reduce local authorities’ dependence on Westminster for individual funding decisions. The package also includes plans for a £1.5 billion borrowing facility and additional support for regional administrations taking on wider responsibilities.
A £285M Fund To Give Local Leaders More Control
The government will allocate an initial £285 million next year through a new Good Growth funding scheme, designed to support investment priorities identified by local leaders rather than determined centrally in Whitehall. According to the BBC, the funding will help reduce reliance on fragmented government funding arrangements, under which councils and regional authorities must compete for separate pots of money to finance individual projects.
The money could support new housing developments, improvements to transport connections and efforts to regenerate struggling high streets. Areas that have not yet established strategic authorities will also be eligible for a share of the funding.
Burnham, who previously served as mayor of Greater Manchester, has made decentralisation a central part of his premiership. He has promised what he describes as the country’s biggest rebalancing of political power. “I’m calling time on local leaders going cap in hand to Westminster. That is no way to run a country,” the prime minister said.
The Guardian reports that the £285 million allocation will provide transitional support ahead of a new funding system expected in 2028, when some income tax revenue will be directed to local areas. Under the proposed arrangements, regional leaders are expected to retain some additional revenues generated by stronger local economic activity, giving them greater financial control over investment decisions.
New Borrowing Powers and Housing Investment Form Part of the Budget
Alongside the immediate funding, the Treasury will work with mayors to develop a £1.5 billion borrowing facility from 2028. The arrangement is intended to provide access to capital for larger infrastructure and development projects.
Regional mayors have repeatedly raised concerns about restrictions on their borrowing powers, particularly compared with local administrations in the United States and parts of Europe. The government will also provide £150 million next year to help strategic authorities strengthen their administrative capacity and expertise as they assume greater financial responsibilities. According to the BBC, Wednesday’s Budget will include more than £1 billion for social and affordable housing in England, taking funding for the government’s 10-year housing programme beyond £40 billion.
London Mayor Sadiq Khan welcomed the prospect of expanded investment powers, identifying projects including the Bakerloo line extension, the West London Orbital route and improvements at Stratford International station. The Treasury is also reviewing how public investment projects are assessed, allowing related housing and transport proposals to be considered together when evaluating their potential contribution to economic growth.
Healey said mayors and local leaders understood their communities’ investment needs and should have greater authority to act on them. Further details of the proposed changes are expected in Wednesday’s Budget, with a subsequent government white paper setting out how responsibilities will be transferred from Whitehall to regional authorities.
