Dialogue Debriefs: Unpacking the Budget
Our Growth and Reform Dialogue analysed the Budget's policy details, highlighting key progress in fiscal devolution and public service reform delivered through new strategic regional mechanisms.
The Growth and Reform Network recently hosted a dynamic dialogue focused on unpacking the details of the November 2025 Budget, exploring its implications for local growth and public service reform. While the budget is unlikely to have fundamentally shifted the dial on economic growth, it highlighted significant developments in the policy details that reinforce the mayoral model and offer new opportunities for regions and cities.
Addressing Child Poverty
- The Budget abolished the two-child benefit cap within Universal Credit, as of April 2026. This reform is projected by the Department for Work and Pensions (DWP) to lift approximately 450,000 children out of relative low-income poverty by the conclusion of the Parliament.
- GRN analysis presented during the dialogue indicated that while this policy affects a relatively small fraction of households across the UK (the national average being 2.5% of households eligible), its material impact on alleviating child poverty represents a crucial and positive short-term step in the context of broader social welfare challenges.
Visitor Levy: Advancing Fiscal Devolution
The Budget delivered a significant step toward advancing fiscal autonomy for Mayoral Strategic Authorities (MSAs) through the introduction of the Overnight Visitor Levy. This new power permits English mayors to introduce a local tax on overnight stays, aligning them with counterparts in major international tourism centres such as Paris and New York.
- This mechanism is regarded as an important progression toward systemic fiscal devolution, symbolically sowing the "very nascent seeds" for an enduring model of fiscal self-determination and shifting the balance of accountability further toward the regional MSA level.
- The levy offers a substantial revenue stream - projected at approximately £11 million annually in Liverpool City Region, a figure comparable to its existing mayoral council tax precept, which can be strategically leveraged by MSAs to invest in core transport funds and generate growth through Mayoral Development Corporations (MDCs).
Enhancing Strategic Investment and Public Service Reform
The Budget outlined several key tools that empower regional leaders with long-term financial certainty and greater control over investment:
- Mayoral Revolving Growth Fund (MRGF): A £500 million fund allocated to six mayors in the North and Midlands holding integrated settlements. This mechanism supplies patient, repayable capital intended to leverage private investment and accelerate commercially viable growth projects, including housing delivery and transport connectivity. The MRGF provides risk-tolerant finance necessary to unlock development often hampered by high upfront costs or investor risk aversion.
- Local Growth Fund (LGF): A new £902 million fund delivered over four years to 11 mayoral city regions across the North and Midlands. The LGF consolidates fragmented funding streams into a single, flexible, locally-led pot, allowing MSAs to align resources with their Local Growth Plans and boost regional productivity through investment in infrastructure, business support, and skills development.
- Integrated Settlements: Seven key Mayoral Combined Authorities received confirmation of Integrated Settlements through 2029-30, offering crucial long-term financial certainty for regional strategic planning.
- Place-Based Budgeting: The government confirmed the trialling of place-based budgets in five MSAs. This constructive pilot aims to test the impacts of locally pooling public service budgets to enhance service delivery and drive prevention efforts, particularly concerning issues like ill health and worklessness.
Relevant Resources:
- Budget 2025: https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html
- Future Governance Forum: The Budget: Putting stability in the spotlight
GRN blogs and insights
Browse other GRN blogs and insights in inclusive growth and public service reform across the UK:
