Government to give mayors £285m seed funding and £1.5bn borrowing facility

Mayors and local leaders across England are to receive an initial £285m of transitional seed funding next year, with a £1.5bn borrowing facility to follow from 2028, the East Midlands Combined County Authority (EMCCA) has said.

According to the EMCCA release, Chancellor John Healey will confirm at the Budget plans to introduce Good Growth funding for local leaders, allowing them to invest in what they judge to be local growth priorities without seeking permission from Whitehall.

Strategic authorities will also receive £150m next year to strengthen their capacity and capability as their powers grow, EMCCA said. The money is intended to let mayors build the resource and expertise to manage larger budgets and more complex investment programmes.

Claire Ward, Mayor of the East Midlands and Chair of UK Mayors, said: "But too often, local leaders have had to navigate a maze of funding pots, with tight restrictions on how money can be spent."

She added that more flexible funding would help with "building the homes people need, improving transport links between communities, or creating opportunities for people to get on in life", and said she would continue to push for the tools the region needs.

The package

EMCCA said the plans were designed to reduce reliance on separate bidding pots hosted in Whitehall. The three elements it set out are:

• £285m of transitional seed funding allocated by government next year to mayors and local leaders across England
• £150m next year for strategic authorities to build capacity as their responsibilities grow
• a £1.5bn borrowing facility from 2028, which the government will design with mayors

The release did not give a Budget date. The figures rest on EMCCA's account of the government announcement.

Prime Minister Andy Burnham said: "I'm calling time on local leaders going cap in hand to Westminster. That is no way to run a country."

Housing Secretary Angela Rayner said in the release that the government was backing local leaders to deliver housing developments, transport links and regeneration. The plans were developed by the Treasury, the Ministry of Housing, Communities and Local Government (MHCLG) and No10 North working with mayors and local leaders, EMCCA said.

The Greater Manchester model

EMCCA said the approach builds on a fund the Prime Minister oversaw as Mayor of Greater Manchester, which uses public investment to attract private money into housing, employment space and infrastructure.

Greater Manchester Combined Authority announced the £1bn GM Good Growth Fund in November 2025. It brings together different funding pots, including an initial £300m from the Greater Manchester Pension Fund, the authority said.

Where it fits

The announcement is the latest in a run of devolution finance moves. MHCLG's Local Growth Fund policy statement allocated more than £900m across 11 mayoral strategic authorities over four years, with the fund due to launch in April 2026. MHCLG described it as a move away from fragmented, short-term competitive pots to a single, flexible, long-term fund.

In July 2026 the government announced that mayors would receive a share of income tax revenues for the first time, with a roadmap on retention to be set out at the Budget. In his growth speech on 7 September, the Chancellor said central government grants would be replaced by a share of local income tax for every mayoral strategic authority from 2028.

No10 North, announced on 23 July 2026, operates from Heron House in Manchester city centre as what the government calls its situation room for growth. Regional mayors would be invited to sit around the table there, the government said.

On 9 October the Prime Minister's Office described the new Good Growth Funds as a single, flexible, long-term growth budget for local leaders. The same release committed £1bn through UK Research and Innovation over four years and said local leaders would receive devolved research and development funding for the first time, to sit alongside the Good Growth Funds.

UK Mayors Network

Ward was elected by fellow mayors to chair the UK Mayors Network, which describes itself as the sector body for strategic authorities, in an announcement on 11 September 2026. She took over from Tracy Brabin after two years as deputy chair. The EMCCA release on the Budget plans styles the body as "UK Mayors".

EMCCA chief executive Amy Harhoff has taken over as chair of the UK Mayors Network Chief Executives, the authority said.

The borrowing facility is due to be available from 2028, the same year the government has said income tax sharing for mayoral strategic authorities will begin.