My previous article on strategic planning after the pause in Local Government Reorganisation highlighted the importance of ‘institutional thickness’ in delivering on planning devolution. This means ensuring that legislative enabling of Strategic Authorities needs the people, governance and budgets that will result in delivery capability.
This matters because the new strategic layer is going to be asked to do a lot: preparing Spatial Development Strategies, agreeing housing growth distribution, infrastructure co-ordination and operating the new mayoral planning powers. All while ensuring that strategic priorities translate into investment in actual projects.
The recent Budget marks a recognition that giving powers without fiscal firepower or institutional capacity is not enough. Two Treasury papers sitting alongside the Budget say a great deal.
Fiscal Capacity – Money
The Fiscal Devolution Roadmap shows the way that Government intends to allow Strategic Authorities to move away from reliance on individual Whitehall grants, towards a more autonomous funding model:
- Mayoral Strategic Authorities retain 20% of business rates from 2027 (plus a share of future business rate growth);
- Performance pays: income tax assignment, linking part of mayoral funding to employment, earnings and economic performance (from April 2028);
- Business Rates Retention Zones to support particular growth locations;
- Good Growth Funds, allowing different funding streams to be brought together around local investment priorities;
- an Overnight Visitor Levy for Strategic Authorities; and
- a £1.5bn mayoral borrowing facility, including the ability to support concessional lending for locally determined projects (from April 2028)
The stated direction of travel is towards local and regional government retaining all business-rate income by 2030. How the redistribution and reset mechanisms will work is a crucial part of this, because some authorities currently export far more than they receive into national pot.
Two things jump out – providing resources to act without central drag; providing incentives for growth.
Institutional Capacity – Power
The more obscure Supporting local investment: An offer to places paper is a striking commitment to building institutional thickness beyond Whitehall. It acknowledges that devolution requires more than just powers and asks national institutions to lend Strategic Authorities people, expertise, data and delivery capability until the SAs can build their own:
- Homes England and the National Housing Bank establishing Place Delivery Agreements and joint delivery teams with Strategic Authorities, bringing housing, land, funding, legal, technical and investment expertise into local delivery;
- NISTA providing spatial-planning and infrastructure support, including its ALIGN modelling tool expressly to support Spatial Development Strategies and cross-boundary planning;
- an Investment Readiness Pool, placing experienced finance, legal, consulting and technical professionals within Strategic Authority teams during 2027/28 and 2028/29 while permanent capability is built; and
- wider support from the National Wealth Fund, British Business Bank, Office for Investment and others to turn local priorities into credible, investable project pipelines.
The Budget itself also provides £150m of additional capacity and capability funding in 2027/28.
Powers -> Institutions: Respect
Once you have the money and the powers, then you can earn the respect.
Strategic planning is about making difficult choices across boundaries and then aligning land, infrastructure, funding and delivery behind them. The new statutory powers create the architecture but the Budget now begins to show how the institutions inhabiting it will gain the capacity to make it work.
Watch this space for the Re-Wiring The State Delivery Plan, which will define the core capabilities Strategic Authorities should ultimately possess.
