Chancellor John Healey will set out a major devolution package in his first budget statement on Wednesday, officials said, aiming to shift more spending power and borrowing flexibility to local leaders across England.
The centrepiece of the plan is a proposed £1.5 billion borrowing facility that the Treasury will design in consultation with city and regional mayors. Ministers say the mechanism will be drawn up collaboratively over the next two years to give local authorities greater access to finance for investment projects intended to boost growth.
The announcement builds on recent calls from mayors for greater fiscal autonomy. Greater Manchester mayor Andy Burnham has pledged that local leaders should no longer have to "come cap in hand to Westminster," and the chancellor’s proposals are being presented as a practical step toward that goal.
Officials framed the measures as part of a wider effort to strengthen regional economies by enabling local leaders to make longer-term investment decisions without seeking central approval for each project. The borrowing facility is intended to provide a more stable funding route for infrastructure and development initiatives that supporters say could support jobs and growth.
The package highlights the continuing debate in Westminster over the balance of power between central and local government. Devolution has been a recurring theme in recent years, with local politicians pressing for more control over housing, transport and economic development. The chancellor’s proposals will be watched closely by both local authorities and opposition parties as they assess their likely impact and implementation timetable.
Healey’s statement on Wednesday will mark a test of how quickly the Treasury and local leaders can convert the broad ambition for greater devolution into concrete financing arrangements. Officials said the two-year collaborative process will be used to set rules, eligibility and oversight for the proposed borrowing facility before it becomes operational.