Britain's chancellor, John Healey, used his first Budget in Parliament on October 28 to set out a wider transfer of tax powers and borrowing capacity to local leaders, backed by £285 million in new Good Growth funding and a £1.5 billion loan facility. The package is aimed at giving mayoral authorities and councils more room to fund transport, housing and regeneration.

Tax revenues would stay closer to home

The Budget set out a roadmap to fiscal devolution that would see local and regional government keep 100% of business rates income before the end of the decade, replacing grants from central government over time. Mayoral Strategic Authorities would begin receiving a 20% share of business rates from April 2027, and mayors would also take a share of income tax receipts from 2028.

Healey also said strategic authorities would gain the power to introduce an overnight visitor levy. The changes are meant to give local leaders more room to shape growth and reindustrialisation, while keeping more of the money raised locally in the places where it is spent.

Fresh money for projects and local capacity

The Budget included £285 million in Good Growth Funds for 2027-28, with £165 million for places with a mayor in place in 2027 and £120 million in incubator capital for areas moving toward a devolution deal or strategic authority status. The government also set aside £150 million to help mayoral strategic authorities build the expertise needed to manage the new powers.

In addition, it confirmed a £1.5 billion borrowing facility from April 2028 for mayoral strategic authorities. Healey said the loans would support projects such as the Black Country Metro extension in the West Midlands. A separate £80 million Local Renewal Fund is also earmarked for regeneration, job creation, heritage assets and local initiatives that boost growth.

Rail projects featured too. The government confirmed £30 million for Cardiff Parkway station, while West Yorkshire mayor Tracy Brabin said the Budget backed plans to transform Leeds station with £300 million and investment in the Leeds College of Building.

Support in Wessex, and caution elsewhere

Local leaders in Wessex — Bournemouth, Christchurch and Poole, Dorset, Somerset and Wiltshire — welcomed the government's support for devolution, saying it would give residents greater local control over decisions on transport, housing, skills, regeneration and economic growth. The councils said the changes could help create better-paid jobs and strengthen transport links.

Not all observers focused on the long-term upside. Highways Magazine said more than 20 major road schemes were cancelled before the Budget to create funding headroom, and Localis chief executive Jonathan Werran warned that the Treasury would have to avoid concentrating revenue gains in London and the greater south east while councils elsewhere remain under financial pressure.