Autumn Budget 2026: Reaction from the sector

A summary of the key measures can be read here.

Cllr Eamonn O’Brien, Chair of the Local Government Association

“Extra funding to tackle rough sleeping and for social housing is positive. However, no overall funding increase for local government means councils will continue to struggle to meet demand and provide services to our communities.

“Government recognises that councils are central to achieving good growth and rewiring the state. These ambitions cannot be achieved if council finances remain fragile and reliant on emergency bailout agreements.

“The full value of local government will only be unleashed if both local and strategic authorities are empowered and financially sustainable. Plans for real fiscal devolution must ensure investment decisions can better meet local needs.

“We need a new deal for local government. Genuine devolution must go beyond mayors and strategic authorities to empower councils themselves. Local authorities know their communities best, and only with adequate funding, meaningful powers and a review of statutory obligations can they have the freedom to focus on local priorities and deliver for their residents.”

Cllr Sean Matthews, Chair of the County Councils Network

“Putting powers into local leaders’ hands is the right thing to do, but the benefits of income tax retention must be shared fairly across England, without disincentivising high-income areas and ensuring that councils receive a fair share of these resources.

“We’ve got a commitment for devolution to go wider, now we need to ensure it goes deeper. In practice, this should mean that the areas announced today – and in future – have access to powers and resources on par with urban mayors. With mayoral elections not expected until 2028, new strategic authorities could wait years to get ‘established’ status and therefore access to the fullest range of devolved powers. Government should confer established status within six months of a mayor taking office: ensuring structural procedures do not hold back growth.

“There remains several county and rural unitary council areas with no devolution agreement of any description. The government must maintain the momentum from today and complete the devolution map as quickly as possible, treating local leaders as equal partners and recognising a mayoral model may not be suitable for every county.”

He warned that strategic authorities and effective regional leadership are dependent upon financially sustainable and resilient councils and highlighted the absence in funding for local councils in the budget. He also raised concerns that the Government’s recent decisions on reorganisation could severely undermine progress on devolution.

“While the government is reviewing these decisions, affected councils are still awaiting the outcome. Unless this review results in a material change in direction, we will continue to face the prospect of large-scale fragmentation and complex boundary change that will create a pattern of reform that is more costly, less stable and less effective than the current two-tier system. This could ultimately weaken, rather than strengthen, the foundations on which meaningful devolution must be built.”

Cllr Richard Wright, Chair of the Local Councils Network

“While we welcome the transfer of power and resources from far-off central Government to closer-to-home strategic authorities, it is only by also empowering and properly resourcing local councils that local communities’ disconnect from power will finally be overcome.

“The Chancellor is right to ensure the lion’s share of business rates are retained by individual local councils, rather than mayors, who are not so connected to local people and business.

“For every local community it will feel that devolution is stymied until the Government focuses on transforming the finances of individual councils so that we can revive cherished local services.

“Next year’s spending review should prioritise action to support local authority services that prevent ill health and hardship thereby benefitting both local people and the Exchequer, as well as the work councils do to promote growth in every postcode. The Government will not achieve its important ambitions until local services are properly funded.”

Cllr Kam Rai, Deputy Chair of London Councils

“Devolution should come as close as possible to communities. As London receives new fiscal powers – including keeping more of the money raised in business rates and income tax – London boroughs must have a key role. Boroughs know our communities best and deliver the crucial local services Londoners rely on every day.

“We therefore welcome the government’s commitment to working with boroughs as well as the GLA to develop a bespoke approach for London. Boroughs need to be equal partners with a formal say on devolved funding decisions alongside the Mayor so we can help ensure the best possible results across the capital.

“The overall outlook for London boroughs’ finances remains extremely difficult, especially due to skyrocketing social care and homelessness costs. We will continue to seek sustainable funding solutions to end the crisis in town hall finances, including through the government’s next Spending Review. Boroughs remain as committed as ever to working with the government on our shared priorities such as building more council homes, supporting more Londoners into work, and generating good growth in every postcode.”

Abena Oppong-Asare MP, Chair of the Housing, Communities and Local Government Committee 

"Last summer, the Housing, Communities and Local Government Committee called for the Government to give ‘serious consideration’ to the further devolution of fiscal powers and autonomy.  Today's Budget will help to devolve the fiscal powers which local leaders need to drive growth locally. On the fiscal devolution roadmap, it’s important that strategic authorities have the capacity and capability to make the most of their new powers and that the right accountability measures are put in place.

“The extra funding provided by the Chancellor to tackle rough-sleeping is welcome but getting people off the streets and under a roof requires the provision of a wide range of support, which needs to be led by national policy."

Phil Holmes, President of ADASS (Association of Directors of Adult Social Services)

“ADASS’s Spring Survey this year found nearly three quarters of Directors of Adult Social Services reported an increase in the number of unpaid carers requiring support. We all need to do more for carers which is why ADASS welcomes the reform of Carer’s Allowance announced in today’s Budget. Unpaid carers will no longer be penalised for working – the very least that they deserve.

“The Budget missed an opportunity to do more to support adult social care and its huge contribution to both our society and our economy. This Government’s commitment to adult social care reform is hugely welcome but the pressures faced by people who need care and support, unpaid carers, our front-line workforce and councils up and down the country continue to grow. The cost of delaying the investment that adult social care needs is much greater than the cost of providing it.”

Simon Goacher, Partner and local government specialist at Weightmans

“These measures represent a significant step towards putting local leaders in the driving seat of economic growth, giving them greater freedom to invest in the vital infrastructure and regeneration projects that communities need. Their success, however, hinges on whether councils have the resources and flexibility to make the most of these new powers. 

“This comes at a time when local government is already under financial pressure, with a patchwork of existing governance arrangements, particularly with the local government reorganisation on pause. Ensuring that fiscal devolution works alongside these wider challenges will be essential, but there is a real opportunity here to simplify an already fragmented landscape and create a more coherent system of local government.

“With clearer responsibilities and accountability in place, local leaders have an opportunity to make longer-term decisions that reflect the needs of their communities. Getting this right could mark a meaningful shift towards a more empowered and financially sustainable local government landscape.”

Amardeep Gill, Head of Public Sector at Trowers & Hamlins

“The move towards greater business rates retention, income tax assignment and new borrowing and investment mechanisms provides an opportunity for local leaders to exercise greater control over their economic futures.

“For councils and strategic authorities, the challenge now shifts from securing powers to using them effectively. The combination of fiscal devolution, new growth funding and reforms to investment appraisal could unlock opportunities for housing, regeneration, infrastructure and partnerships with the private sector.

“However, devolution must be accompanied by financial sustainability. Greater responsibility without sufficient resources risks adding pressure to councils already facing significant financial challenges.”

Peter Ware, Partner and Head of Government at Browne Jacobson

“Assigning a share of income tax revenues and increasing business rates retention for English mayors marks the most significant shift in the fiscal relationship between Westminster and local leaders in a generation.

“What's particularly notable is that this goes beyond a simple funding transfer. The roadmap envisages mayoral authorities being funded increasingly through locally generated tax revenues rather than short-term Whitehall grants, with a share of business rates from 2027, income tax assignment from 2028, access to new borrowing powers, and greater flexibility over how funding is spent locally. That is a fundamentally different model of local and regional government.”

On the procurement announcements, he said: “The expansion of challenge-led procurement is a genuinely significant shift in how government thinks about its role in the market.

“Rather than simply buying what already exists, government becomes a first customer and co-creator of the solutions it needs, which changes the dynamic considerably for innovative British firms that have historically struggled to break into public sector supply chains.

“But the new definition of UK supplier is where the legal complexity lies. The WTO's Government Procurement Agreement prohibits discrimination against overseas suppliers in above-threshold procurements.”

Ben Standing, Partner in planning at Browne Jacobson

“Recognition of the impact imposed on communities that host vital public infrastructure such as data centres is an important first step in securing broad public support for building these sites.

“Too often, decisions taken nationally without considering how these will be felt locally, which is why we have seen growing opposition to major developments – whether in housing, renewable energy or, more recently, data centres.

“It’s therefore heartening to hear government making a firm commitment to investing in those communities that host such infrastructure so they share in the rewards via local benefit plans. If developers can be proactive in making improvements to local priorities such as transport, public spaces and access to key services, there is a greater chance of new data centres being supported, or at least accepted, by communities.”

David Alcock, Partner and head of social business at Anthony Collins

“This Budget confirms Government’s focus on boosting the supply of social housing with the announcement of more funding, new fiscal incentives to encourage development and greater focus on devolved decision making.

“The Chancellor announced an extra £1.5bn for the Social and Affordable Homes Programme (SAHP), taking its total value to over £40 million. He also announced that the sale of land for development to registered providers of social housing will be VAT free. To support devolved decision making and give local authorities more flexibility to invest, it was also confirmed that local authorities will retain all of their business rates by the end of the decade.

“These announcements send a clear message to local authorities and housing associations that Government will back them their development activity and crucially that local leaders will have say in how funding decisions are made. Devolution will make it possible for local organisations to engage directly with decision makers and ensure the needs of local communities are reflected.”

Andrew Cromb, Partner at Devonshires

“Devolution is central to the Burnham government’s agenda and that has been reaffirmed by this budget. This will see the role of local government in delivering housing significantly expanded, with the Chancellor announcing funding including a share of income tax and retention of 100% of local business rates to help accomplish this. Given the deeper reservoirs of expertise in industry, a further expansion of joint ventures is probably the likeliest outcome when it comes to translating this into the delivery of new houses, but the crucial factor will be how this funding is delivered to and then spent at the local level.

“The removal of VAT from land sold for social housing is a step in the right direction and should aid delivery by making land acquisitions more straightforward, allowing for greater flexibility before the construction reaches the ‘golden brick’ stage. The UK has, perhaps understandably, been criticised for the increasing complexity of its taxation regime, so simplifications of this nature that make life more straightforward are almost always welcome. Registered providers and local authorities will, however, need to carefully consider the current state of ongoing projects in light of this change, particularly any that currently depend on ‘golden brick’ agreements.”

Jonathan Hulley, Partner and joint Head of Social Housing at Birketts

“The additional £1.5 billion commitment to social and affordable housing represents a welcome boost for the sector. This investment will support the delivery of much-needed homes at a time when waiting lists remain high and homelessness pressures continue to grow.

“Housing investment also supports jobs across the construction, infrastructure and professional services sectors, while helping to deliver the economic growth the country needs. In addition, increasing the supply of social and affordable housing can help local authorities reduce their reliance on expensive temporary accommodation. That said, it is important to recognise that housing providers continue to face unprecedented financial and regulatory pressures.

“Many are also having to meet significant costs associated with damp and mould remediation, stock improvement programmes, building safety works and wider asset management responsibilities. While additional grant funding is welcome, it may not be sufficient to fully offset these growing pressures.”

Jonathan Werran, Localis chief executive

"There is a lot to positively drive the reform of local public services here under the aegis of ‘Rewiring the State’, the guiding hand of Number 10 North and the clear direction set by prime minister Andy Burnham’s insistence on embedding place-based collaboration as the default setting.

"This agenda for local public service integration and future promise of ring-fenced prevention could well provide a genuine opportunity for whole-place budgeting and modern place-based business plans to tackle systemic challenges like worklessness and skills shortages.

"Most 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."

Kirsty Harrower, Partner at Norton Rose Fulbright

“The Data Centre Covenant could help unlock strategically important projects in the UK by accelerating access to grid capacity and the planning process. However, it should be noted, according to the Covenant this support will come with greater expectations around energy and water use, community benefits and security. The key question for developers and project owners will be how the Government defines which projects qualify as ‘strategic’.”

Adam Carey