Budget 2026: what powers will John Healey hand over to Yorkshire mayors?
The Chancellor will set out a “roadmap” for fiscal devolution in the Budget.
Devolution is expected to play a major role in John Healey’s first Budget, following Andy Burnham’s commitment to moving power out of Whitehall.
Since coming into Downing Street in July, Mr Burnham has announced moves to hand over a portion of income tax and business rates to mayors, as well as powers over water companies and apprenticeships.
IPPR North director Zoe Billingham told The Yorkshire Post: “We are expecting the Government to make a positive first commitment to fiscal devolution and give the mayors greater control and flexibility over money raised in their area.
“This is about where decisions are made over how public money is spent.
“We think mayors, with their direct mandate to the public and being more locally anchored leaders, have a better insight into what the public want in their area and what is needed.
“That is a core pillar of why devolution is important. It is very easy for national governments to generalise about places and think that one offer or intervention can fit everywhere, and we know that’s not the case.”
The idea is to give local leaders more flexibility to spend funding on their priorities.
It is expected that the money raised by mayors through devolving a portion of business rates in 2027 and income tax in 2028 is likely to mirror current government grants.
Centre for Cities estimates it will be around 2 per cent of income tax for West Yorkshire and 3 per cent for South Yorkshire.
IPPR North wants around 5 per cent of income tax revenues handed over, to super-charge projects such as West Yorkshire’s mass transit network.
Ms Billingham explained that the more mayors have “certainty over income streams into the future then they can leverage, not just money for one or two years” but further down the line.
“It helps give certainty to investors that they can support them on an ongoing basis,” she explained.
“It could help them borrow against future income streams so it gives them a lot of flexibility and super-charge what they can do with that money.”
In particular, this is expected to help some of the mammoth infrastructure projects going in, including the Leeds and Bradford tram network and Doncaster Sheffield Airport being taken back into public ownership to reopen.
Mr Healey is also likely to hand over some bureaucratic powers around transport projects to the mayors.
Transport and Works Act Orders (TWAO) are required to approve mass transit schemes, and currently sit within Whitehall.
Kane Emerson, one of the authors from the CBP, said: “This Budget coming up will have a lot of devolution announcements.
“There has been a lot of lobbying from the mayoralties so we’re really hoping this power is included, and we think there is a good chance it is.
“If mayors are to be accountable for local areas and growth in the regions then they need to be given actual powers.”