Mayors get new borrowing powers and cash

English mayors will gain direct access to a new £1.5bn borrowing fund under plans set to be revealed in next week's budget. Prime Minister Andy Burnham stated that local leaders will no longer need to seek approval from Westminster for individual projects. The new facility will be developed with mayors over the next two years.

The package also includes £285m in initial funding available for local priorities next year. Leaders can direct this money toward housing, transport links, or high street regeneration. This cash is intended to bridge the gap until 2028, when a new system will pass some income tax revenue directly to local areas.

Burnham said the changes would end the era of local leaders seeking Treasury permission for every project. "I'm calling time on local leaders going cap in hand to Westminster. That is no way to run a country," he said. He noted that he had promised to move decisions closer to home when he became prime minister.

Chancellor John Healey said the government is giving local leaders more money and power to build homes and make decisions for their areas. He stated that mayors know what their communities need to grow. The budget will provide further detail on the revenue-sharing model, allowing local leaders to keep part of the extra revenue generated by a stronger local economy.

The Treasury is allocating £150m to help local authorities build expertise and manage larger budgets. Officials have expressed concern about whether some authorities can handle the increased financial responsibility. This support is designed to help local teams scale up their operations.

The devolution package was developed with No 10 North, which has held weekly meetings with local leaders to identify barriers to growth. This work led to a change in the Treasury's "green book" guidance. Under the new rules, projects that boost growth, such as combined housing and transport schemes, can be assessed together.

Healey's first budget is also expected to include support for poorer households dealing with rising energy costs. He has said he wants to give households and businesses breathing space after the war in the Middle East pushed up bills. The chancellor will also explain how he plans to fully fund the four-year defence investment plan announced during the final days of Keir Starmer's premiership.