Healey Hands Mayors Direct Control of 1.5 Billion Pound Loan Fund

Prime Minister Andy Burnham announced on Friday that England's local leaders will gain direct authority over a 1.5 billion pound borrowing fund. The measure is part of a devolution package that Chancellor John Healey will present in his budget statement on Wednesday. Burnham stated the reforms aim to stop local officials from seeking individual Treasury approval for every project.

The new borrowing facility will be negotiated with mayors over the next two years. Regional leaders have previously argued that limited borrowing powers restricted their ability to invest. In the United States and parts of Europe, local authorities regularly issue their own bonds, a practice that Burnham, a former mayor of Greater Manchester, cited as a model for the UK.

The package includes an initial 285 million pound allocation for growth funding available next year. Local leaders can direct this money toward housing, transport, or high street regeneration. These funds are intended to bridge the gap until 2028, when a new system will transfer a portion of income tax revenue directly to local areas. This revenue-sharing idea was originally proposed by Rachel Reeves, Healey's predecessor.

Treasury officials have raised concerns about whether some local authorities possess the capacity to manage larger budgets. To address this, Healey will announce 150 million pound in support to help councils build internal expertise. Burnham said the government was giving leaders more money, power, and capacity to make decisions for their areas.

The devolution plan was developed with No 10 North, a unit that holds weekly meetings with local leaders to identify economic barriers. This collaboration led to changes in the green book, the government's guidance on public investment. Under the new rules, related projects such as housing and transport schemes can be assessed together to maximize growth impact.

Healey's first budget will also outline support for households facing rising energy costs and include modest tax increases on banks. The Chancellor aims to provide breathing space for consumers after Middle East conflicts pushed up bills. He will also explain how the government plans to fully fund the four-year defence investment plan introduced during the final days of Keir Starmer's leadership.