This article explores the key themes of the Autumn Budget and what it means for economic development. A recording of our Budget Briefing Webinar will be published here on the afternoon of 29 October 2026.
The Autumn Budget was delivered against a mixed backdrop. The economy has performed somewhat better than expected, but borrowing costs have risen and the wider global environment remains challenging. The Office for Budget Responsibility now expects UK economic growth of 1.2% in 2026. The Government also reports that total investment across the economy has increased by 6.9% since the start of this Parliament, with business investment up by 7.5%.
At the same time, the Government expects to spend an additional £14 billion a year on average on debt interest. This limits the room for large, immediate interventions and helps explain why much of the Budget’s significance lies in the medium-term policy framework it establishes rather than a large number of short-term growth measures.
The Budget repeatedly emphasises high-growth firms, devolution and the ambition to “rewire the state”. For economic development teams, the practical question is how these themes change the way places set priorities, assemble funding and deliver growth.
The new Fiscal Devolution Roadmap sets out how the Government intends to give local areas greater control over funding and economic decisions. The offer is strongest for places with a mayor, but the direction of travel matters to every local area.
From April 2027, mayors are expected to receive 20% of locally retained business-rates revenue. Local authorities’ share will increase to at least 70% in the coming years, with the Government intending business rates to become fully locally retained by the end of the decade. From 2028, Mayoral Strategic Authorities will also receive a share of income tax revenue. The roadmap also discusses previously announced powers for Strategic Authorities to apply a levy on overnight visitors.
The Budget says the Government is in advanced stages of agreeing devolution settlements with Devon, Plymouth and Torbay; Hertfordshire; Lancashire; Leicester, Leicestershire and Rutland; Stoke and Staffordshire; Surrey; Thames Valley, covering Oxfordshire, Berkshire and Swindon; and Wessex. It also identifies a Strategic Authority for Kent and Medway, with its model dependent on the outcome of local government reorganisation, and a single Foundation Strategic Authority for Cornwall.
The Budget also provides £285 million of capital grant funding for Good Growth Funds in 2027–28, focused on mayoral areas that did not receive City Densification Fund funding and on emerging Strategic Authorities. Mayoral Strategic Authorities will be able to draw on a £1.5 billion borrowing facility for locally determined growth investment, subject to the detailed framework and eligibility arrangements.
For local economic development teams, this is more than a set of individual funding pots. The central question is shifting from “Which national programme can we apply to?” towards “What do we want to invest in, how can we plan for the long term, which powers and resources can we bring together, and how should we focus resources?”
The Budget combines cost-of-living support for the public with measures intended to help businesses scale and invest. From April 2027, business-rates relief for pubs, social clubs and live music venues will rise to 35%. More retail, hospitality and leisure properties will qualify for Small Business Rate Relief, with the Chancellor saying that a further 70,000 businesses in these sectors will pay no business rates. Other businesses in the sectors will receive a two-year freeze in real terms.
The Budget also provides additional capacity for the British Business Bank, widens access to growth finance and includes targeted support for underrepresented entrepreneurs, including female founders. Alongside the Budget, the Government published further detail on the finance offer available to local places, including support for commercial equity investment.
A new Founders’ Relief will begin in April 2027, offering a 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains. A new scheme will support eligible young founders with living costs for one year. The Budget also changes how research and development tax relief is administered and expands support for employee share options.
Public spending is also expected to play a stronger role in supporting local jobs, fair work and skills. A new National Procurement Policy Statement is due in March 2027. The Government has also set a target for apprenticeships to account for at least 3% of the workforce on large government infrastructure and construction projects.
The Budget frames skills and labour-market participation as core economic development challenges. Around one million young people are not in education, employment or training, while around 2.7 million people are out of work because of long-term sickness. The UK also continues to face gaps in technical and job-related skills.
The Budget set out plans for responsibility for joining up jobs and skills support closer to move closer to local areas, although delivery arrangements will vary. The Budget provides £100 million over two years to expand local apprenticeship services in mayoral areas, helping mayors connect young people with opportunities and employers with candidates.
Measures with wider relevance include a £3,000 Youth Jobs Grant for eligible recruits, the extension of the Jobs Guarantee to people aged 22 to 24, and a £2,000 hiring payment for non-levy-paying employers in England taking on new young apprentices. In areas without a mayor, councils, training providers and employers will need to work together to make the most of these measures.
Plymouth provides an example of the approach, with the Budget allocating £3 million to help people who are not in education, employment or training enter the city’s growing defence industry.
The wider message is that skills support should become part of local growth plans rather than a separate activity. Mayoral areas may have more formal powers, but non-mayoral places can still organise employers, councils and providers around the needs of priority industries.
Alongside the Budget, the Government published Hope on the High Street, a new strategy covering empty buildings, business support, public safety, local leadership and the use of publicly owned property and land. Councils are expected to lead much of this activity, giving mayoral and non-mayoral places an important role.
The plan is supported by a £210 million Community Assets Programme. This comprises £125 million for a Derelict Buildings Fund across 60 councils, £65 million for community ownership, £10 million for High Street Rental Auctions and £10 million for a Regional Co-operative Development Programme.
The support for co-operatives and mutuals has been growing over recent years and Andrew Pakes MP has been appointed as the Government’s Co-operatives and Mutuals Champion, with a remit to identify barriers to growth and promote the contribution that member-owned businesses can make to local economies and community wealth.
Which projects are ready for investment? - Every place will need a clear evidence base, a focused set of priorities and robust propositions. Projects should demonstrate what they will achieve beyond business as usual, how they align with wider economic priorities and where they can attract private investment. In non-mayoral areas, partners should also agree leadership, financial risk and delivery responsibilities early.
How can business, skills and place-based support be joined up? - Places should seek to connect business finance, procurement, skills, innovation, inward investment and improvements to local centres around shared outcomes. Mayoral areas can use regional powers to coordinate this activity. Elsewhere, councils can make progress through sustained partnerships with employers, training providers, neighbouring authorities and finance institutions.
Is there enough capacity to deliver? - Greater freedom over funding brings greater responsibility. Places need clarity about who convenes partners, who makes decisions, who manages delivery and how benefits for residents and businesses will be measured. New powers and funds do not guarantee successful delivery. Delivery capacity, programme management and evaluation should be treated as core parts of investment propositions and can play a vital role in driving successful and sustained local growth.
