England’s devolution agenda is set to receive a significant place in the first budget statement from John Healey, with the chancellor preparing to include a new package aimed at giving local leaders more direct control over spending decisions. The centrepiece will be a £1.5bn borrowing facility, to be developed with mayors over the next two years, as part of a wider attempt to link local decision-making with economic growth.
The proposal builds on a political message advanced by Andy Burnham, who has argued that leaders across England should no longer have to go “cap in hand to Westminster” to secure support for regional priorities. The plan places devolution at the heart of the budget narrative, signalling that the government wants mayoral authorities to have a stronger role in shaping investment rather than relying solely on central approval from Westminster.
The borrowing facility will not be immediately finalised. Its details are due to be drawn up in collaboration with mayors during the next two years, leaving key questions about eligibility, governance and the types of projects that could be supported for later stages of design. Even so, its inclusion in Wednesday’s statement gives the policy a formal budget platform and ties it to the chancellor’s wider growth agenda.
For England’s mayors, the measure could become an important test of how far fiscal powers are allowed to move away from the centre. Borrowing capacity can affect the pace at which local administrations invest in transport, infrastructure and regeneration, although the final impact will depend on the framework agreed with the Treasury. The approach also reflects a broader debate in England over whether economic policy should be more closely shaped by city regions and local institutions.
The budget will therefore be watched not only for national tax and spending decisions but also for the balance it strikes between central control and regional autonomy. By placing a named borrowing facility alongside a commitment to work with mayors, John Healey is positioning devolution as part of the government’s economic toolkit. The practical significance of the package will become clearer as the scheme is developed with local leaders beyond Wednesday’s statement.