Now that markets have settled following the seismic Autumn Budget 2024, it is clear that this government backs mayoral combined authorities through a raft of measures to allow existing CAs greater financial freedoms and autonomy.
As well as all CAs being some of the key winners from the budget, Manchester and the West Midlands continue to set the precedent with their trailblazer status. Some key announcements relating to CAs included:
- The government is implementing the first integrated settlements for the Greater Manchester and West Midlands Combined Authorities from the start of the 2025-2026 financial year, as well as for the North East, South Yorkshire and West Yorkshire Mayoral Combined Authorities, and Liverpool City Region Combined Authority from the start of the 2026-2027 financial year;
- The first integrated settlements for the Greater Manchester and the West Midlands Combined Authorities will deliver a single flexible pot of funding with a single outcomes framework to support Mayoral Combined Authorities and deliver growth. Whether an integrated settlement could apply for the Greater London Authority from 2026-2027 will also be explored;
- The government will also simplify the wider local funding landscape. It plans to do this by reducing the number of grants afforded and consolidating them into the Local Government Finance Settlement, as well as moving towards a multi-year settlement for local government so that local authorities are able to plan more effectively. The local growth funding landscape will be reformed at Phase 2 of the Spending Review, which will involve rationalising the number of funds, moving away from competitions, and better supporting local leaders to drive growth.
- Of the government's investment and devolution plans, the government will be investing £115 million in 2025-2026 to deliver Connect to Work, a new supported employment programme which patches people with disabilities or health conditions into vacancies. The Greater Manchester and West Midlands Combined Authorities will have the flexibility to tailor their delivery of this programme, with funding included in their Integrated Settlement;
- 100% business retention rate agreements will also be extended for the West of England Combined Authority, and Cornwall and Liverpool City Region for 2025-2026;
- In respect of borrowing powers, it was announced in the Autumn Statement 2016 that Mayoral Combined Authorities would be given powers to borrow for new functions subject to a cap agreed with HM Treasury. In line with this approach, the government will legislate to provide the North East Combined Authority, East Midlands Combined County Authority, and York and North Yorkshire Combined Authority with borrowing powers across the full range of their functions. Borrowing powers will be granted to newly established Mayoral Combined Authorities;
- Looking ahead to the upcoming English Devolution White Paper, this will set out further details on the government's plans to widen devolution to more areas and deepen the powers of existing mayors and their combined authorities. The government will be working with local councils to move to simpler structures catered specifically to their areas with a focus on efficiency savings from council reorganisation to help meet the needs of local people.
The announcement of the English Devolution White Paper in the budget marks a significant step toward empowering regions across England. This commitment to devolution means local areas will gain greater control over decisions that directly impact their communities, from infrastructure and housing to healthcare and economic development. For the public sector, this shift holds promise for more tailored, responsive public services, designed to reflect the unique needs and priorities of each region – although this may be conditional on local government reform where relevant.
As devolution progresses, public sector organisations should prepare for new opportunities to collaborate at a local level with the view to driving positive change. We should all expect more regional partnerships and a focus on aligning resources to address local priorities. This move towards localised decision-making also presents the potential for increased funding autonomy, supporting more impactful investments in local projects. Ultimately, devolution aims to reduce the “one-size-fits-all” approach and create a more balanced, prosperous, and representative governance structure for England.
