Solihull: Chancellor Rachel Reeves on a visit to Jaguar Land Rover. Photo: Lauren Hurley/No 10 Downing Street

Fiscal devolution: Chancellor puts “place at the heart of decision-making”

27/11/25

Budget promises funding and structural changes to support place-based investment into complex and flagship projects across the country, writes Christine Murray

The government has promised to “put place at the heart of decision-making” announcing funding and central government reform for regeneration projects across England.

The place-based approach is fuelled by a commitment to “fiscal devolution” – which sees the government devolving housing funds for the first time across Greater Manchester, Greater London, Liverpool City Region, the North East, South Yorkshire, West Midlands and West Yorkshire through the integrated settlement. It also sees the launch of new levys and business rates reform to support local economies.

The budget papers read: “In total, £1.3bn of the new National Housing Delivery Fund will be devolved, supporting established and non-established Mayoral Strategic Authorities. This will support leaders to deliver ambitious growth projects in their area and develop strategic sites across the country, building on existing government investment in places such as Liverpool Central Docks and Forth Yards in Newcastle.”

Stephen O’Malley, chief executive of Civic, welcomed the move towards a place-led government, seeing fiscal devolution as “the government empowering regions to shape their own economic futures.”

“Today’s announcement shows why fiscal autonomy matters to deliver bold growth and regeneration plans at pace. With stronger local powers and collaborative planning, we can turn ambition into action and build investor confidence by showing what’s possible,” O’Malley says.

The budget included several measures to invest in places, including:

-- £13bn in SR25 of flexible funding via integrated settlements from 2026-2027 to 2029-30 for seven mayoral strategic authorities, with a commitment to roll out integrated settlements in more places at the next spending review

-- £27.8bn for the National Wealth Fund, investing in clean energy and infrastructure

-- £902m over four years for a new local growth fund for 11 mayoral city regions in the North and Midlands

-- £500m mayoral revolving growth fund for mayors in the North and Midlands with an integrated settlement

-- £7bn for the successor to the Affordable Homes Programme for mayoral strategic authorities

-- A further £15.6bn via the Transport for City Regions Fund – to invest in the renewal of supertrams for South Yorkshire, extending the Metrolink to Stockport, a new bus fleet for Liverpool City Region and upgrades to Leeds Rail Station

-- Confirmation of £150m for Creative Places Growth Fund for West Midlands, West of England, West Yorkshire, North East, Liverpool City Region and Greater Manchester, with £25m for each Mayoral Strategic Authority

-- An additional £1.5bn and a total of £9bn over the next decade to accelerate and release surplus Ministry of Defence land to support the delivery of 100,000 homes – including a new ‘Forces First’ approach to boost homeownership opportunities for veterans and Armed Forces personnel.

-- £18m to upgrade and improve playgrounds across England

The budget also included investment in the planning system, with £49m of additional funding to boost capacity and recruit an extra 350 planners in England, expand the Pathways to Planning Graduate Scheme and create a new Planning Careers Hub to retain and retrain mid-career professionals.

The RTPI welcomed the announcement, Dr Victoria Hills, Chief Executive of the RTPI, says “The new funding is not just a boost for local authorities, it is an acknowledgement that planners are vital to driving the government’s growth agenda and economic productivity.”

As part of its movement towards fiscal devolution, the budget announced the creation of a business rates retention zone in Leeds city centre to create the Leeds City Fund: This will allow Leeds to retain 100% of business rates growth above an agreed baseline for 25 years to invest in regeneration.

The budget said business rates retention zones could be rolled out to other Mayoral Strategic Authorities and extended rates retention existing pilots in Cornwall, the West of England and Liverpool City Region.

The government is also consulting on the option to introduce a visitor levy on overnight levy accommodations, which similarly could be used to regenerate local places.

For high streets, the Chancellor has laid out permanently lower tax rates for retail, hospitality and leisure properties that will see small and standard properties pay the lowest tax rate since 1990-1991 and 2020-11 respectively. Those with rateable values of £500,000 and above, representing 1% of properties, will face a higher rate. Other measures for the high street include a promise to clamp down on illegal high street activity linked to money laundering.

Other announcements included a default ’yes’ to development around train stations.

Projects named that would receive funds included the Leeds South Bank, Peterborough sports quarter, Lower Thames Crossing and Northern Powerhouse Rail.

Central government reform to become more ’place-led’ could include changes to the Green Book.

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Fiscal devolution: Chancellor puts “place at the heart of decision-making”

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