The Government has set out plans for a £1.5 billion borrowing facility for mayors in England from 2028, alongside new funding intended to give local leaders greater control over investment in their communities.
The proposals, disclosed ahead of the 28 October 2026 Budget, also include £285 million in transitional Good Growth funding next year and £150 million for strategic authorities to strengthen their staffing and expertise. The Treasury says the measures are intended to reduce reliance on centrally controlled funding competitions.
How the borrowing facility would work
Ministers say they will work with mayors to design the £1.5 billion facility over the next two years, with access to borrowing planned from 2028. It is intended to provide capital for locally identified growth projects, including housing, transport connections and high-street regeneration.
The £1.5 billion is proposed borrowing capacity, not an immediate grant or money already paid to councils. The terms of the facility and the projects ultimately financed have yet to be finalised.
Good Growth funding and support for regional authorities
The initial £285 million allocation is intended to allow mayors and other local leaders to choose investment priorities with less need for case-by-case permission from Whitehall. The Treasury says areas without established strategic authority status will also be able to access a share during a transitional period.
A separate £150 million is planned for strategic authorities next year to help them develop the capacity to manage larger budgets, complex investment programmes and expanded devolved responsibilities.
Ministers argue for greater local control
Chancellor John Healey says England's cities and regions have economic potential that has been constrained by centralised decision-making. Prime Minister Andy Burnham has argued that local leaders should not have to repeatedly seek approval from Westminster for investment decisions.
East Midlands mayor Claire Ward, chair of the UK Mayors Network, welcomed the prospect of more flexible powers and resources. The proposals also raise questions about how borrowing risks will be managed and whether places without established mayoral structures will benefit on comparable terms.
What happens next?
The measures are due to be formally presented in the Budget on Wednesday 28 October. The £285 million and £150 million are planned funding for next year; the borrowing facility is proposed for 2028 and remains subject to design work. Announced allocations should not be confused with completed projects or guaranteed economic returns.
Sources: East Midlands Combined County Authority: official announcement (24 October 2026); Reuters: UK Budget set to hand English mayors new borrowing powers (24 October 2026).