HM Treasury’s 2026 budget schedules portions of business-rate and income-tax revenue for English mayoral authorities beginning in 2027, while 10 proposed devolution agreements remain subject to local consultations.
From April 2027, Mayoral Strategic Authorities (MSAs) are due to receive 20% of locally retained business rates, replacing specified funding streams, and 20% of any business-rate growth in their regions. The government intends local and regional government collectively to retain all business rates before the end of the decade, with local authorities keeping at least 70%.
An income-tax share for MSAs is scheduled to begin in April 2028. The share and funding baselines are due to be set at the 2027 Spending Review; income-tax rates and thresholds are to remain the same across England. The Treasury presents the measures as linking local revenue to commercial development, employment and earnings. Its roadmap says UK subnational government receives the smallest share of its funding from taxes and relies most on central-government grants among G7 countries.
The 10 proposed agreements include mayoral authorities for Devon, Plymouth and Torbay; Hertfordshire; Lancashire; Leicester, Leicestershire and Rutland; Stoke and Staffordshire; Surrey; Thames Valley (Oxfordshire, Berkshire and Swindon); and Wessex. The other proposals are a Strategic Authority for Kent and Medway, whose status could be mayoral or foundation-level depending on local-government reorganization, and a Foundation Strategic Authority for Cornwall. Local consultations are the next step.
The government says the agreements, if completed, would bring more than 90% of England’s population under a devolution agreement. Bedford, Central Bedfordshire, Luton and Milton Keynes have broad agreement but no local consensus, according to the budget. Full coverage is an aim for the end of 2028.
The budget provides £285 million in 2027-28: £165 million to help areas with a mayor in place that year establish Good Growth Funds, and £120 million in incubator capital for places moving toward a devolution deal or strategic-authority status. It also sets out a £1.5 billion borrowing facility for MSAs, due to be operational from April 2028. The government plans legislation that would allow Strategic Authorities to introduce an optional levy on overnight stays; local leaders are expected to be able to set out plans by March 2028.
The roadmap applies to England. The budget says Scotland, Wales and Northern Ireland will receive additional funding through the Barnett formula. A Rewiring the State Command Paper setting out the broader plan and delivery timetable is due before the end of 2026; further income-tax assignment details and funding baselines are due at the 2027 Spending Review.
