Autumn Budget 2025: pushing the fiscal frontiers and the delivery challenge of devolution's new divide?

David Marlow
2 hours ago
6 min read

LEDC’s Autumn Budget 2024 Espresso Shot and blog positioned Labour’s first Autumn Budget as a major reset moment for local economic development and devolution. In the last twelve months, Government has fleshed out much of the detail of the foundations of that reset. LEDC has covered this in, among others, episodes on White Papers (e.g. Devolution and Get Britian Working) and legislation (e.g. Devolution and Community Empowerment, Planning and Infrastructure Bills), the Spending Review, key strategies (e.g. Industrial, Infrastructure) and ten-year plans (NHS).

Autumn Budget 2025 was announced amidst a cacophony of leaks and rumours about taxation and expenditure cuts, with sluggish growth and productivity, an increasingly alarming and turbulent global context, and the national political situation fraught both between parties and within Labour.

Both of us consider the announcements and papers of November 26^th warrant a double espresso shot. But we have focused our comments specifically on the medium- and longer-term implications of the reset 12 months on for LED and placemaking policy makers and practitioners.

This blog discusses five big ticket issues we consider merit further thinking and development as places seek to make sense of where the UK now is sub nationally on our respective journeys to place and community based inclusive growth and development.

Houses of Parliament illustration, with Budget papers and a briefcase strewn across the foreground

The new geography of devolution and development post Budget 2025

Autumn Budget 2025 cements a clear hierarchy and benchmark for devolved powers in English subnational governance. Mayoral Strategic Authorities (MSAs) are the undisputed "gold standard" for growth and development. They will have potential Visitor Levy fiscal power, targeted 100% Business Rates Retention Zones (like the Leeds City Fund), control over large 3–4-year Integrated Settlements, and preferential access to funds like the £500m Mayoral Revolving Growth Fund and £7bn of the Social and Affordable Homes Programme.

Conversely, non-MSA areas face more precarious futures. They lack the bespoke integrated settlements, the ability to raise new local taxes, and the large, pooled capital funds, leaving them dependent on competing for smaller, often short-term central pots.

Concurrently the devolved nations need to reassess their own subnational growth models. With MSAs achieving increasing levels of fiscal autonomy and local growth influence, the pressure is on Edinburgh, Cardiff, and Belfast to ensure their own regional structures are equally empowered to deliver rapid, sustainable economic development.

This new geography will have profound implications for the ‘day jobs’ of those of us working in these new geographies. MSA policy makers and practitioners will have a set of priority roles and functions distinct from those in the rest of England, and those working sub-nationally in the devolved nations. And these differing day jobs may have spillover impacts on recruitment, retention and development of those working in LED and placemaking.

Calibrating enhanced devolution with national priorities and top-down cultures

The Integrated Settlements (IS) offer MSAs a powerful new mechanism to pool fragmented funding for particularly infrastructure, business growth and skills. However, the fundamental test of this 'enhanced devolution' lies in how it recalibrates local approaches with established national priorities. There is an inherent risk that the settlements become overly prescriptive and bureaucratic, essentially compelling MSAs to merely act as efficient delivery agents for existing central mandates.

Where major departments and agencies operate powerful, risk-averse top-down cultures, the true measure of devolution's success will rest on the boldness of the MSAs. Over the next couple of years, we would like to see:

Proposals for genuinely experimental innovations—like the GMCA Prevention Demonstrator—that fundamentally challenge central departmental rules rather than too readily defaulting to 'safe' projects to maintain a stable Whitehall relationship and spend.
MSAs using their funding flexibly to tweak mainstream national programmes out with the integrated settlements, and considering how to use other funding pots, the visitor levy, their own precepting powers, and perhaps new fiscal devolution to deliver improved outcomes.
Having the confidence to use the ‘right to request’ to begin to bring those departments – especially DHSC/NHS – and UKRI into delivery of their Local Growth and Get Britain Working Plans and their new spatial strategies.

Only through strategic, outcome-driven risk-taking can MSAs prove that their local knowledge justifies permanent and increasing fiscal and policy autonomy. It is worth bearing in mind that, notwithstanding the significant integrated settlements, they amount to only just over £100 per person in the MSAs excluding London. Total public spend per capita nationally (TME) is over £19000, and Identifiable Public Expenditure (TPE) is around £13,500. Devolved Nation Governments spend between £7,500 (Wales) and £10,000 (Scotland) per capita, and even GLA is at around £2,000.

The challenge of devolved delivery

The starkest risk to this new sub-national regime is delivery capability, capacity and commitment.

For MSAs, the challenge is institutional: moving from strategic oversight to the complex, multi-sector delivery required by the pooled budgets and other resources. MSAs may need public servants with new skill sets at scale. The failure to spend allocations quickly and effectively risks damaging their own institutional and the entire devolution project's credibility.

For non-MSAs, the new geographies of devolution may reinforce their lack of scale and dedicated capacity to compete for, let alone manage, the complex funding streams they rely on. Without the guaranteed capital of integrated settlements, they face perpetual uncertainties and short-termism.

The reset strategies and plans have recognised national capacity deficits – for instance planners and in construction – which will be amplified in some localities and regions. And, sustaining political commitment to these projects and programmes is likely to become even more contested as we go through further local and devolved nation elections, into the shadow of a 2028/29 general election.

Can the devolution dividend be delivered before the next general election?

The preceding section surfaces the priority of ‘proving’ these long-term resets, realising popular and stakeholder support for them, before they become 2028/29 General Election political battlegrounds.

For MSAs, getting diggers on the ground and well-valued skills retraining underway is critical. Using new revenues (like the Visitor Levy) to visibly improve street scene and urban living is vital. LED and placemaking practitioners need to identify, design and deliver volumes and quality of quick wins.

At the same time, LEDC continues to believe a new constitutional settlement will ultimately be required to reconcile the new geographies of devolution powers and resources, together with viable solutions to sub-national financing, and the extension in-scope of big-spending roles and functions like the NHS. Currently, it seems that this opportunity to formally embed the reset will not be taken.

Where will growth and productivity come from?

The central paradox of the Autumn Budget is that these advanced devolution reforms sit alongside OBR forecasts predicting continued sluggish growth and deeply concerning productivity trends.

The budget directs many of its new, flexible, and long-term sub-national financial levers squarely at the Mayoral Strategic Authorities (MSAs) predominantly in the North and Midlands. At the same time increasing tax take almost inevitably falls disproportionately on London and the South East as the only regions generating fiscal surpluses – reinforced by measures like the High Value Council Tax and Business Rate multipliers. Meanwhile, the devolved nations receive Barnett consequentials but need to determine the sub-national regimes most likely to deploy it effectively.

Resolving this paradox may require sub-national leadership teams and practitioners to look beyond the Government’s growth mission flagships. Especially where capital-intensive, high-tech clusters are sparser, attention must shift, at least partly, to the Foundation and Everyday Economies and interventions to improve skills, digital adoption, and management capability within these sectors.

Whether the current offer of the Budget will enable or distract from this remains very uncertain.

Concluding remarks

The Autumn Budget 2025 accelerates the shift towards a two-tier England defined by the MSA Gold Standard. It creates both unprecedented opportunity and significant operational risk. In MSAs, practitioners must now pivot from strategic bidding to aggressive, outcome-driven delivery. The pressure is on MSAs to demonstrate the boldness to use their new settlements for genuine local tailoring and innovation, improving on the hegemony and outcomes of national models. Outside the MSAs, one must continue to deliver, alongside determining what the MSA gold standard means for their ‘ask’ of national and devolved nation governments.

The Budget 2025 strapline is “Strong Foundations, secure future”. Government can probably legitimately claim that the foundations suggested in the 2024 Autumn Budget are now much more firmly embedded, and the superstructure for the MSAs has begun to be erected. But there is so much more to be resolved before we can be confident about the ‘secure future’ part of the equation.