Healey's First Budget to Include Major Devolution Package to Boost Growth
UK Chancellor John Healey will present his first budget next week, featuring a new £1.5bn borrowing facility for local leaders and £285m in "good growth" funding. Prime Minister Andy Burnham says local leaders will no longer need to go "cap in hand to Westminster".
The UK government will include a broad package shifting financial power to English regions in its budget next Wednesday. Chancellor John Healey, presenting his first budget, has planned a new £1.5bn borrowing facility to be drawn up with regional mayors over the next two years. Prime Minister Andy Burnham said local leaders will no longer have to go "cap in hand to Westminster", the seat of the UK government and parliament.
What the package contains
Regional mayors have long complained that their borrowing powers are limited, unlike local authorities in the US and some European countries, which commonly issue their own bonds. The package also includes an initial £285m of "good growth" funding for next year, to be spent on local leaders' priorities such as housing, transport links or high street regeneration.
The money is meant to tide areas over until 2028, when a new system takes effect under which some income tax revenue will go directly to local areas. The idea was first floated this year by Healey's predecessor, Rachel Reeves. Local leaders are expected to keep some of the extra revenue generated by a stronger local economy.
Because the Treasury has concerns about whether some local authorities can administer ever-larger budgets, Healey will also announce £150m to help them build capacity and expertise.
Wider context
The package was prepared with No 10 North, which holds weekly meetings with local leaders about barriers to growth. This week the Treasury already announced changes to the "green book", the guidance on which projects taxpayers should fund; projects that can work together, such as a housing and a transport scheme, can now be considered jointly.
The budget is also expected to include support for poorer households facing higher energy costs and modest tax rises, including on banks. Healey is not expected to say when the UK will commit to spending 3% of GDP on defence; that is likely to be postponed to a spending review due next year.
