UK Budget to Empower English Mayors with New Borrowing and Tax Revenue Control

POLICY WIRE — Manchester, England — British finance minister John Healey is set to utilize the upcoming budget to decentralize economic authority, granting mayors across England significant new financial tools and expanded administrative powers.

The centerpiece of this initiative is a £1.5 billion ($2 billion) borrowing facility, scheduled for development in collaboration with regional leaders starting in 2028. This mechanism is designed to provide local authorities with improved access to capital for essential infrastructure projects.

Chancellor Healey stated that the strategy aims to harness the “untapped and wasted” potential within regions and cities. By shifting decision-making away from Westminster, the government intends to align English mayoral authority with the operational models seen in major global hubs like New York, Paris, and Milan.

In a significant policy shift, mayors will receive a portion of income tax revenue for the first time. This change ensures that local communities see a direct financial benefit when their regional economies expand, effectively incentivizing growth across every postcode.

The budget also allocates more than £1 billion toward social and affordable housing, pushing the total funding for the 10-year social and affordable homes program beyond the £40 billion mark. Furthermore, the government plans to assist local councils in housebuilding efforts by extending offers of preferential borrowing rates.

These fiscal reforms, which also involve Chancellor Rachel Reeves, represent a departure from decades of centralized economic management. By granting regional leaders greater control over development projects and infrastructure levies, the government hopes to accelerate housing and commercial construction timelines nationwide.

Reporting by Policy-Wire (PW)