For highways, the Autumn 2026 Budget 'giveth and taketh away': there was the cancellation of over 20 major road schemes in advance of the announcement to help provide funding headroom, but also the promise of long-term fiscal devolution to support local and regional infrastructure investment.

Giveth

Good growth in every postcode was one of the main points chancellor of the exchequer, John Healey, highlighted.

As part of this, the budget sets out a ‘roadmap to fiscal devolution', which will see ‘the biggest transfer of power and resources out of Whitehall in a generation' and is intended to empower local leaders to drive growth and reindustrialisation.

'The government intends for local and regional government to retain 100% of business rates income before the end of the decade in place of grants from central government, with the share retained by local authorities increasing to at least 70%. This process will begin with MSAs receiving a 20% share of business rates from April 2027,' the Budget document states.

The chancellor also unveiled Good Growth Funds to support mayors and local leaders in ensuring ‘there is investment and good growth everywhere' via investment in ‘financial assets'.

To support these funds, the Government will be providing £285m in 2027-28; £165m of this will be used to support mayors in place in 2027 to establish Good Growth Funds, with the remaining £120m of incubator capital funding earmarked for areas ‘transitioning towards a devolution deal or strategic authority status'.

The funds will also be supported by ‘a bespoke borrowing facility' of £1.5bn for Mayoral Strategic Authorities (MSAs), which the Government expects to be in operation by April 2028 to allow MSAs to ‘build up the capacity necessary to operate devolved loan funding'.

These loans, according to Mr Healey, will be used to support projects such as the Black Country Metro extension in the West Midlands.

Alongside this, the budget also featured income tax assignment for all Mayors beginning in 2028 and plans for all Strategic Authorities to have the power to introduce an Overnight Visitor Levy.

There was also the announcement of 'a new £80m Local Renewal Fund to invest in local economic regeneration, support job creation, maintain heritage assets and back local initiatives that boost economic growth'.

‘Taken together,' Mr Healey stated, ‘these are long-term funding streams that can be used to back investment into big local infrastructure, so that more of the money that is raised locally can be invested and spent locally.'

Localis chief executive, Jonathan Werran, said: ‘Excitingly today's Budget finally sets out the long-awaited fiscal devolution roadmap, devolving all of business rates from the end of the decade - with 20% going to mayors next year and a share of income tax to mayors also in 2028 as well as the confirmation of the visitor levy.

‘The challenge the Treasury now faces is that delicate balancing act to prevent revenue gains accumulating disproportionately in London and the greater south east, providing some insurance to less prosperous areas while maintaining growth incentives across all regions.

‘Crucially, our mayoral strategic authorities, which will principally benefit from fiscal devolution, cannot power regional growth while their constituent local councils remain hamstrung by crippling statutory service cost pressures.

‘These great ambitions for place risk being undermined by national spending plans that remain untenable "fantasy public finances", at least until next year's Spending Review forces a reality check.'

There were also a string of smaller announcements such as £11m for the replacement of the Aberavon bridge in Port Talbot, £30m to progress delivery of Cardiff Parkway railway station and a potential Tax Increment Financing mechanism at Euston, based on a business rates retention zone, to help fund London Underground upgrades.

Taketh away

Ahead of the announcement today, the Department for Transport (DfT) confirmed that 25 of the 41 Major Road Network and Large Local Majors (MRN/LLM) programme schemes have been cancelled.

While 15 of these were already confirmed by the DfT as not going ahead, the remaining 10 that were also ‘under review' will not be proceeding either.

Those schemes are:

  • Shrewsbury North Western Relief Road
  • Warrington Western Link Road
  • Rocket Junction Liverpool - M62 J4 / A58
  • Sheffield Innovation Corridor Road
  • A13/ A126 East Facing Slip Roads
  • A1237 YORR dualling Phase 2 - Wetherby Rd to A19
  • Aylesbury Eastern Link
  • Shipley Eastern Congestion Relief Road
  • West Quay Road Realignment, Southampton
  • A17 Pullover Junction

However, these schemes were not cancelled by the Government. Instead, the DfT stated that these 10 schemes ‘were withdrawn from the programme on the grounds that the promoting local authority can no longer afford its funding contribution.'