The 2026 budget pledges new powers and funding for mayors, but many regions risk being left out, raising concerns over widening inequality.

Chancellor John Healey used the 2026 budget to unveil what he called the biggest wave of devolution in a generation. The plan promises to shift income‑tax receipts and business‑rates revenue to mayoral combined authorities, with a target of 100% of business‑rates income by 2030 and a new overnight‑visitor levy to fund local services.

Key milestones for mayoral combined authorities

• 2028: partial income‑tax receipts transferred to strategic authorities (MSAs)
• Next year: 20% of business‑rates revenue allocated to mayors
• By 2030: mayors receive 100% of business‑rates income and can levy taxes on hotel stays

Areas covered and those left out

• 14 mayoral regions – including Manchester, West Midlands and Liverpool – are on track for enhanced deals
• Ten additional MSAs are being finalised for Devon‑Plymouth‑Torbay, Hertfordshire, Lancashire, Leicester‑Leicestershire‑Rutland, Stoke‑Staffordshire, Surrey, Thames Valley, and Wessex
• Essex secured about £1.2 bn over ten years; Cornwall is negotiating an upgraded deal

What traders are watching next

• Publication of the Rewiring the State delivery plan next month, which will detail funding flows and timelines
• Potential political pressure if large swathes of England remain without mayoral powers, possibly affecting fiscal stability of local authorities
• Comments from the Local Government Information Unit on the need for financial resilience across all tiers of government

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This article is compiled from international market news for information only. It is not investment advice.