05 Aug 2026
The Government has announced a major new package of devolution reforms aimed at giving local leaders greater control over investment, public services and economic growth across England.
Under plans unveiled by the Prime Minister, English mayors will, for the first time, retain a share of income tax revenues generated within their areas, alongside a greater share of business rates. The Government says this will allow communities to benefit more directly from local economic growth, with additional funding available to invest in local priorities.
The reforms are intended to move decision-making away from Westminster and give local leaders greater responsibility for shaping transport, housing, skills, employment support and regeneration in their areas.
Among the proposed changes, local leaders will gain greater powers to:
- Improve and integrate local bus and rail services.
- Bring forward new housing and unlock stalled development sites.
- Take greater control over major transport schemes and planning decisions.
- Shape skills funding and employment support to meet local labour market needs.
- Support local industries and attract investment to create new jobs.
The Government has also announced a new “local first” principle, under which departments will be expected to justify why powers should remain in Whitehall rather than being devolved to local areas.
While much of the announcement focuses on mayoral combined authorities, the Government has said that areas without a mayor will also be supported to establish strategic authorities and gain greater control over local priorities as devolution continues to expand.
The detail of how these arrangements will operate in practice, including the future funding model and the timetable for extending powers to new strategic authorities, is expected to be set out in a roadmap alongside the Autumn Budget.
Kerry Booth, Chief Executive, Rural Services Network:
The Government’s commitment to devolving more powers and funding is a significant step, and giving local leaders greater control over the decisions that affect their communities has the potential to deliver real benefits.
As the detail is worked through, we want to make sure that rural communities are fully reflected in the new arrangements. Many of our members are in areas without a mayor or are still navigating their way through the devolution process, so there is a risk that they may not benefit at the same time as those more urban areas already with mayoral arrangements in place.
The rural economy needs to have the opportunity to contribute to the prosperity of the nation and it’s important that they have the same opportunity to benefit from funding.
