UK Chancellor John Healey plans £1.5bn borrowing facility for England
The proposed Budget package would give local leaders more control over investment, with interim funding before planned income-tax sharing begins in 2028.
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The proposed Budget package would give local leaders more control over investment, with interim funding before planned income-tax sharing begins in 2028.
UK Chancellor John Healey plans to propose a £1.5bn borrowing facility for local leaders in England in the 28 October Budget, the Guardian said on 24 October, with the facility to be developed with mayors over two years. The planned package would also include more than £1bn for social and affordable housing and preferential government borrowing rates for councils building homes, the BBC said on 25 October.
Regional mayors have long said limited borrowing powers constrain them. The proposed transfer of spending powers is intended to give local leaders more control over investment and support regional economic growth.
The BBC says the additional housing investment would take funding for the government’s existing ten-year homes programme above £40bn. The proposed increase would support social and affordable housing in England.
Councils are also expected to receive preferential interest rates when borrowing from the government to invest in housebuilding. Those rates would give councils more favourable borrowing terms for building homes. Both provisions are expected Budget measures, rather than funding and borrowing arrangements already in force.
The previously reported package combines proposed borrowing powers with transitional funding and support for authorities managing larger budgets.
The government plans a 26 November start for suspensions covering 101 food and agricultural products, including garlic, gherkins and plant-based milk.
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| Amount |
|---|
| Proposed measure |
|---|
| Purpose and timing |
|---|
| £1.5bn | Borrowing facility | To be designed with mayors over two years, for access from 2028. |
| £285m | Initial “good growth” funding | Planned for 2027, for local priorities such as housing, transport links or high street regeneration. |
| £150m | Administrative support | To expand local authorities’ capacity and expertise, addressing Treasury concerns about their ability to manage larger budgets. |
The transitional allocation would bridge the gap until planned income-tax sharing begins in 2028, giving local areas some revenue directly for more secure long-term funding. Local leaders are expected to retain some additional revenue generated by a stronger local economy, providing an incentive to support growth.
Prime Minister Andy Burnham said the proposed package would remove the need for local leaders to seek Treasury approval for each individual project.
Separately, new Treasury Green Book rules allow complementary projects to be assessed together for their combined contribution to growth. The Green Book guides decisions about which projects should receive public money. A housing development and a transport scheme, for example, can be considered together rather than separately.
Healey is due to present the Budget on 28 October, including further details of the proposed income-tax arrangements.
The Budget preserves the £20,000 annual cash ISA allowance and proposes a 24% rate on savings and rental income for basic-rate taxpayers from April 2027.
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Under the announced Your First Home terms, eligible first-time buyers purchasing qualifying new-build homes in England can seek a 20% equity loan with a deposit from 2.5%. Applications are scheduled to open in February 2027.
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