New Budget measures give mayors more fiscal tools, while devolution progress and planning reforms continue to reshape city policy.
What cities got from the Budget
In a major win for England’s big cities, Chancellor Rachel Reeves confirmed that England’s mayors will gain the powers to raise an overnight visitor levy. This brings England in line with its international peers and is a step in the right direction toward giving mayors the fiscal powers needed to deliver higher growth.
Cities can also welcome further commitment to wiring mayoral authorities into the business rates system, with 100 per cent business rates retention pilots extended in the Liverpool City Region and the West of England Combined Authority until 2029. The Government also confirmed it will devolve £13 billion of flexible funding through the Integrated Settlements to seven mayors, giving more funding certainty to the city regions.
Also announced was £902 million over four years for a new Local Growth Fund for 11 city regions in the North and Midlands, focused on infrastructure, business support and skills projects set out in their Local Growth Plans. Further detail on a £500 million Revolving Growth Fund for mayors in the North and Midlands with Integrated Settlements was also provided, which will help these regions work alongside public finance institutions to invest in growth projects.
Additional commitments were made to regional growth projects. In particular, the establishment of the Leeds City Fund — a long-term agreement to retain business rates to fund local regeneration projects such as the development of Leeds Southbank.
Looking to transport, the Government committed to investment for the Lower Thames Crossing, support for TfL’s plan to extend the DLR to Thamesmead, and continued investment in the Midlands Rail Hub and the Transpennine Route, along with commitments to the Northern Growth Corridor, including Northern Powerhouse Rail. Also announced were the freezing of regulated rail fares in England for one year from March 2026 and the introduction of an Electric Vehicle Excise Duty from April 2028.
Devolution
While the Government’s devolution agenda has made real progress since May 2024, it has now faced its first significant setback, with mayoral elections in Greater Essex, Norfolk and Suffolk, Hampshire and the Solent, and Sussex and Brighton postponed from 2026 to 2028.
Yet on the ground in cities where devolution is up and running, there is plenty to be positive about. The Mayor of Greater Manchester, Andy Burnham, has launched both his plan to transform the city’s rail system over the next thirty years and a £1 billion public investment fund for the city, with plans to allocate £400 million in the first wave of projects, aiming to deliver over 22,000 jobs and nearly 3,000 homes. The Mayor of the Liverpool City Region, Steve Rotheram, has launched his first Mayoral Development Corporation in the city’s North Docks area to deliver 17,500 homes and five million square feet of commercial space over the next 15 years.
Planning policy continues to evolve
The Government has said it intends to provide a “default yes” to suitable planning applications for development within a reasonable walking distance of well-connected train and tram stations. This new policy will form part of the consultation on a revised NPPF by the end of the year. It was also announced that some statutory consultees will be removed from the planning process under additional changes to the NPPF in an effort to help combat delays and inefficiencies in the planning process.
Meanwhile, the Housing Secretary has announced he will require local authorities to notify him where they intend to refuse an application for 150 homes or more, giving him the opportunity to decide whether to take it over.
Looking to the Planning and Infrastructure Bill, one single matter needs to be reconsidered by the Commons before the Bill gets its long-awaited Royal Assent.
Jess Tulasiewicz is Policy and Public Affairs Manager at the Centre for Cities
This is the second in a new blog series from Centre for Cities picking out the most important policy announcements affecting the UK’s largest towns and cities. Originally published on 10th December 2025.
Feature Image Source: Centre for Cities