Chancellor John Healey has launched his first Budget, mentioning the word 'roadmap' many times, but the word 'road' not once: this was a budget focused on keeping the lights on and the Government on course.

With the economy performing better than expected, the chancellor declined to focus on boosting growth through project spending as many have done before. Instead, this was a stepping stone budget towards long-term reforms designed to ease the pressure on families and businesses, while also laying the foundational terms for fiscal devolution.

Mr Healey vowed to give ‘local and regional government…100% of business rates income before the end of the decade in place of grants from central government'.

Local government business rate share is set to increase to ‘at least 70%', with mayors retaining a 20% share of locally retained business rates from next year.

The small print of the Budget documents revealed ten new devolution agreements were in the final stages, including a mayor for Kent and Medway ‘only if its reorganisation outcome allows'.

Another headline announcement was the creation of Good Growth Funds, 'giving local leaders greater flexibility to invest in local growth priorities with £285m in transitional seed funding for one year in 2027-28, accompanied by a devolved borrowing facility for MSAs (mayoral strategic authorities) of £1.5bn from April 2028 to catalyse investment into regional growth priorities'.

Energy reform

Blaming much of the financial pressure the UK is facing on rising oil prices due to conflict with the regime in Iran, Mr Healey made energy reform a central part of his opening.

He made announcements on retail and wholesale challenges, with market reforms and a £2.6bn Household Energy Payment, 'which will provide a £100 payment directly into bank accounts from January 2027 for households in England in council tax bands A-D, supporting up to 20 million households'.

'For many years, under Conservative governments, policy costs were simply loaded onto household bills through levies. Today, I am putting an end to that. We'll introduce a new cost control framework to drive down all aspects of energy bills,' he said.

'I'm making further big changes to bring bills down in the long term. First on clean power generation. This government will only buy and build new projects when they lower bills and when they can connect to the grid.

'Second, we will further break the grip of international gas prices on our bills by moving more of our old renewables onto fixed-price contracts. And third, we will build cheaper, faster grid connections through GB grid and reform the complex web of institutions that govern the system. This is how we deliver radical change Britain needs on energy.'

Government reform

By the next spending review, Healey vowed to have a digital overhaul of the government, including a review of NHS productivity and AI, to ringfence prevention spending and to streamline the state through devolution, including ‘reducing the double running between central and local government'. This includes plans to cut Whitehall roles and functions that will no longer be needed due to devolution.

As a result of its plans to rewire the state, the Government also pledged to reduce 'departmental administration budgets by 20% by 2029‑30,' the Budget document said.

Mr Healey raised the statutory lending limit for the Public Works Loan Board from £135bn to £155bn, with an option to increase to £175bn. On housing, an extra £1.5bn has been ploughed into building new homes, ‘especially council homes', allocated from 2027-28 and rising over time to allow capacity building.

A further £432m has been set aside to tackle rough sleeping, while the chancellor promised no additional building regulations. The chancellor also raised minimum wage levels and offered cash for an apprenticeship scheme to mayors.