“Good Growth in Every Postcode” Programme
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)
Good growth in every part of the country depends on local leaders being able to invest in their own places with certainty and over the long term. In the “Rewiring the State” Cabinet statement published on 31 July, the Government committed to support mayors to establish good growth funds across England, putting investment decisions in the hands of leaders who know their areas and answer to the people who live there. I am today informing the House of the first steps to deliver that commitment. The Chancellor will confirm these plans at the Budget.
Mayors and local leaders have long relied on a patchwork of fragmented funding pots held in central Government, each with their own bidding processes and conditions. That makes it harder to plan for the long term, to assemble the finance that complex schemes need, and to attract private investment alongside public money. Good growth funds will give local leaders across England the flexibility and authority to invest in the priorities that they judge will do most for growth in their area, without seeking permission from siloed Government Departments for individual investment decisions. That could mean new housing developments, the regeneration of town centres, new places for people to work, or the infrastructure that connects communities to one another and to jobs.
This approach has proved successful in Greater Manchester, using public investment to crowd in private finance behind housing, employment space and major infrastructure, and we will support local leaders to deliver a good growth fund that works for their region. As set out in the Cabinet statement, good growth funds will be backed by national public financial institutions and supported by the local government pension scheme as a key local investor, so that local leaders can invest for the long term in their local economies.
The fiscal devolution roadmap, to be published alongside the Budget, will set out how mayoral strategic authorities will benefit from much greater financial freedom in the years ahead, particularly once a share of income tax is assigned in 2028-29. The Government are, however, determined to help local leaders deliver good growth immediately and today we are confirming £285 million in 2027-28, comprising of mayoral funding for good growth funds and incubator capital funding for other areas transitioning towards mayoral devolution.
The Government will also work with mayors to design a new £1.5 billion borrowing facility available from 2028, giving them access to the financing they need to back the local priorities that will drive growth in their areas. That work will consider how the facility sits alongside the other sources of finance on which good growth funds will draw.
The Government will back this up and strengthen delivery by providing strategic authorities with an additional £150 million in 2027-28 to strengthen their capacity and capability as their range of powers and responsibilities grow. This funding will support mayors and strategic authorities in building the resource, expertise and institutional strength that these new functions and fiscal responsibilities require. It sits alongside the commitments in the Cabinet statement to a smaller and more strategic civil service, focused on the challenges that can best be dealt with at a national level. The Government will work with strategic authorities to undertake a fuller assessment of their capacity and capability, including new responsibilities, to inform funding baselines at the next spending review.
These measures are a first step. The fiscal devolution roadmap and the “Rewiring the State” delivery plan will further set out how good growth funds fit within our wider plans to give back control to local leaders, beginning with the retention of a share of business rates from April 2027 and income tax assignment for mayors from April 2028. I will update the House as this work progresses.
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