The government's Budget 2026 fact sheet is built around a simple idea: if a place generates more growth, more of the tax and spending power should stay there. Ministers are pitching the package as a move away from Whitehall control and towards mayors, councils and new Strategic Authorities, with local leaders expected to take a bigger role in shaping economic policy. For businesses and workers, that matters because this is not just a constitutional rewrite. It reaches into bus networks, housing delivery, skills budgets, high street renewal and the way local investment projects are funded. In practical terms, it is about who gets to make the economic calls in a town or city, and who gets to keep more of the upside when new jobs, commercial space and homes are created.

One of the headline changes is scale. The government says it is in the final stages of agreeing 10 new devolution arrangements, which would take coverage to more than 90% of England's population and, for the first time, the whole of the North. The stated aim is full devolution coverage by the end of 2028, with remaining areas expected to reach local agreement on Strategic Authorities as soon as possible. That may sound procedural, but the effect is fairly direct. More control over buses, housing and skills would move out of Whitehall and into regional hands. For an employer dealing with patchy transport links or a shortage of trained staff, that could mean decisions being made closer to the firms and households living with the problem.

The biggest financial shift is business rates retention. The Budget says business rates will become a fully locally retained tax by the end of the decade, with mayors receiving 20% from April 2027 and local authorities' share rising to at least 70% in the coming years. Business rates are the property tax paid by occupiers of shops, offices, factories and warehouses, so this is a direct attempt to tie local government income more closely to local economic activity. In plain terms, councils and mayors would have a stronger incentive to support commercial development because more of the proceeds would stay local. The government is also promising a General Anti-Avoidance Rule for business rates, plus help with external legal costs when councils challenge avoidance through the courts. It says discussions will continue on whether areas should eventually gain greater local control over business rates policy itself, while still protecting business certainty and fairness between places.

Housing and place renewal sit alongside the tax changes. Ministers have earmarked an extra £1.5 billion to deliver 10,000 homes across England, with funding prioritised for Social Rent, especially council homes. That takes total investment in the Social and Affordable Homes Programme to more than £40 billion over 10 years, while preferential Public Works Loan Board borrowing rates for council housebuilding will stay in place for another year. There is also £125 million for 60 English local authorities through a new Derelict Buildings Fund, aimed at turning neglected properties into assets communities can use, from health centres to civic spaces. Add in the High Streets Strategy and an £80 million Local Renewal Fund for projects across the UK, including non-mayoral areas, and the government is clearly trying to show that regeneration is not only for big city centres. The Budget also promises fewer separate grants and lighter reporting demands at the Spending Review, which should leave councils with more room to focus on delivery.

The package reaches households too. From January 2027, the government says households in council tax bands A to D in England will receive a £100 Household Energy Payment, with up to 20 million households eligible. A further £100 million will go to English local authorities to support residents most acutely affected by rising energy bills. This sits slightly apart from the devolution story, but economically it is part of the same picture. If household energy costs are eating into disposable income, local high streets and small firms feel that pressure quickly. Ministers are therefore trying to pair longer-term regional growth reforms with short-term cost of living support, even if the two strands operate on very different timescales.

The Fiscal Devolution Roadmap is where the longer-term structure becomes clearer. The government plans income tax assignment for all mayors from 2028, further increases in business rates retention, and legislation so every Strategic Authority has the power to introduce an Overnight Visitor Levy. In other words, regions are being offered a broader tax base and more tools to fund local priorities. There is money behind that shift, although much of it arrives from 2027 onwards. The Budget confirms £165 million in 2027-28 for places with a mayor in 2027 to roll out Good Growth Funds, extending support to areas that missed out on the earlier City Densification Fund. It also sets out a bespoke £1.5 billion borrowing facility for Mayoral Strategic Authorities by 2028, alongside a £150 million uplift in 2027-28 to help Strategic Authorities build the staff capacity and expertise needed to handle wider powers and more complex funding.

Alongside the roadmap, ministers want to test place-based incentives more directly. The first wave of Mayoral Strategic Authority Business Rates Retention Zones will cover nine authorities, subject to legislation and full business case approval, with projects cited in places including Stratford, Derby and Selby. Existing mayoral areas will also share £28 million through No10 North's Priority Projects Programme for schemes in Don Valley, Bristol Temple Quarter and Leeds South Bank. Areas still moving towards devolution are not being left outside the programme. They are due to receive a £120 million share of Good Growth Fund incubator capital, access to an expanded Priority Projects Programme if they sign a new devolution deal or elect a mayor in 2027 or 2028, and support to prepare strong business cases where needed. The central question now is not whether the government has announced enough funding lines. It is whether local leaders can turn these new tax powers, borrowing tools and regeneration schemes into faster decisions, stronger town centres and jobs that feel rooted in place rather than directed from the centre.