In his inaugural budget statement scheduled for Wednesday, Chancellor John Healey is expected to unveil a significant devolution package designed to stimulate regional economic growth. A central component of this plan is the creation of a £1.5 billion borrowing facility, which will be developed in partnership with regional mayors over the next two years.

This policy shift addresses long-standing concerns from local leaders regarding their limited financial independence. Currently, regional authorities in England often lack the ability to issue their own bonds, a practice that is common among local governments in the United States and various European nations. By providing this new borrowing mechanism, the government intends to move away from a model where local leaders must frequently petition Westminster for funding, often described by Greater Manchester Mayor Andy Burnham as coming "cap in hand."

The proposed facility is intended to empower local authorities to make more autonomous investment decisions, theoretically allowing them to better tailor economic development to their specific regional needs. While the government frames this as a necessary step to boost growth, the full details of the regulatory framework and the specific conditions under which these funds can be accessed remain to be clarified in the upcoming budget announcement. The move represents a notable change in the relationship between central government and regional administrations, signaling a potential shift toward greater fiscal decentralization in England.