The Chancellor’s 2025 Autumn Budget confirms the Government’s intention to provide those in Local Government with increased powers of taxation and governance, including the introduction of the visitor levy.

The Autumn Budget also reaffirmed Government’s commitment to invest in capital infrastructure, support new transport links, new homes and greater energy security and additional investment in major growth projects. Additional details have been provided in the budget in respect of funding through integrated settlements and other devolved funding.

This article will unpick the key takeaways for those in Local Government from the raft of proposals announced in this year’s Autumn Budget. 

Visitor Levy

• Mayors, and potentially other local leaders, will have the option to introduce a visitor levy on overnight visitor accommodation in their areas.
• The proposal is subject to consultation and Government believes this will fund further investment in growth locally, including the visitor economy.
• The levy will apply to tourists visiting hotels, B&Bs, guesthouses, and holiday rentals/lets but what the specific cost itself would be to visitors is currently unknown.
• The Ministry of Housing, Communities and Local Government described the levy as a “modest charge.”
• A 12-week consultation, is now underway, ending on 18th February 2026, which invites business, residents, and various tourism sectors to engage and be involved in how the levy would work in practice.

Integrated Settlements

• £13billion of Spending Review 2025 (SR25) funding via integrated settlements from 2026-27 to 2029-30 has been confirmed for seven Mayoral Strategic Authorities: Greater Manchester, West Midlands, Liverpool City Region, West Yorkshire, North East, South Yorkshire and the Greater London Authority.
• Government confirmed that it remains committed to rolling out integrated settlements to more places at the next Spending Review.

Mayoral Revolving Growth Fund

• A £500million Mayoral Revolving Growth Fund has been launched for mayors in the North and Midlands with an integrated settlement, working alongside a wider set of public financial institutions.
• The fund will devolve repayable finances to 6 established Mayoral Strategic Authorities in Greater London, Liverpool City Region, the North East, South Yorkshire, and West Midland for investment in commercial projects that deliver long term growth.
• The Mayoral Strategic Authorities must aim to repay the capital and associated borrowing costs to ensure value for money and is intended to be a strategic investment partnership between central government and mayors to support local economy development.
• Government has said that the fund will allow mayors in key city regions to invest in “game-changing growth projects alongside the private sector”.
• Mayoral Strategic Authorities will also be able to bid for around £7billion worth of funding through the successor to the Affordable Housing Programme.

Local Growth Fund

• £902million is being provided over four years for a new local growth fund for 11 mayoral city regions in the North and the Midlands, allowing mayors to invest in key local growth projects.
• The Local Growth Fund is designed to equip mayors to boost regional productivity and support infrastructure investment, strengthen business support and skills development.
• Government has said that the design of the fund will differ between places and should be developed by local leaders in line with their Local Growth Plans.

Delivering new homes and new towns

• A total of £1.3billion will be devolved through the National Housing Delivery Fund to support established and non-established Mayoral Strategic Authorities across Greater Manchester, Greater London, Liverpool City Region, the North East, South Yorkshire, and West Midland through integrated settlement.
• Government believes this will support leaders to deliver ambitious growth projects in their areas and develop strategic sites across the country.
• The commitment to build 1.5million new homes in England was reaffirmed. A £39billion Social and Affordable Homes Programme and the new £16billion National Housing Bank was announced in June.
• Tempsford, Leeds South Bank and Crews Hill and Chase Park have been identified as the most promising sites for development of new towns. Decisions on the location of new towns will be informed by Strategic Environmental Assessments with the new locations due to be announced in the spring.

Business Rate Retention Zone

• Support is being provided to West Yorkshire Combined Authority by the establishment of the Leeds City Fund. Leeds City Centre will be a business rate retention zone and Leeds City Council can retain 100% of the business rate growth above an agreed baseline for 25 years within the zone.
• Early discussions are being had with mayors of South Yorkshire, the West of England and the North East to explore these options and how the business rates retention zones can support local growth plans.
• The 100% business rates retention pilots in Cornwall, the West of England and Liverpool City Region will be extended for a further three years to allow the areas to continue retaining the benefits of business growth.
• Government is also developing a business rates retention zone offer with standardised criteria at Mayoral Strategic Authority level.

Major Infrastructure Projects

• Allocation of £16million of funding has been made for a construction of a STEM centre in Darlington.
• £4.2million has been committed for the remediation of brownfield land in Port Talbot supporting the Harbourside Invocation District.
• A further £891million is being provided to complete the publicly-funded work for the Lower Thames Crossing which will improve links between the Midlands and the North and the key ports in the South East.

Police and Crime Commissioners and re-organising local government structures

• Government has said that savings of over £250million to 2030-31 will be made by cutting the cost of politics, this includes the abolishment of Police and Crime Commissions.
• Through re-organising local government structures, Government believes there will be potential to reduce the number of councillors in local authorities by around 5000 to generate savings and streamlining accountability in local areas.
• Through delivering a leaner civil service and reducing back-office administration cost by 15% by 2029-30, Government wants to focus resources on frontline services.

Business and Entrepreneurship

• A £4.3billion support package to cap business rates increases for those hit hardest by revaluations, and the introduction of permanent lower business rates tax rates for eligible retail, hospitality, and leisure properties.
• £1.5billion being made available over the Spending Review period for investment in employment and skills support, over £725m of which is earmarked to help support apprenticeships for young people and will include a change to fully fund SME apprenticeships for eligible people under 25.

Best Start Family Hubs

• £500million has been committed to local authorities to deliver up to 1000 Best Start Family Hubs across England by the end of 2028.
• The aim is to improve parenting support and contribute towards Government’s Plan for Change milestones of having 75% of children meeting their early learning goals at age 5.

School Rebuilding Programme and investment in public services and the wider community

• The School Rebuilding Programme is being expanded. Government is providing almost £20billion of investment from 2025-26 to 2034-35.
• The Government will set out its substantial plans for reform of special education needs provision early in the new year to deliver a sustainable system which – first and foremost – supports children and families effectively.
• Provision of funding of £18m over two years to refurbish and improve up to 200 playgrounds in England.

Conclusion / Capsticks’ view

The announcements in this year’s Autumn Budget will provide Local Government stakeholders with room for optimism but will leave many wanting for detail, precision, and certainty particularly around the announcements around the new visitor levy.

While many will welcome the increased powers and autonomy in principle, the future operations and decision making of those in Local Government will hinge on the detail promised by the Government in the next year, particularly in light of the announcement relating to integrated settlement, the Mayoral Revolving Growth Fund and the local growth fund.

How Capsticks can help

Our specialist local government team have extensive experience in supporting authorities and Combined Authorities deliver change through devolution and Local Government Reorganisation, advising on governance and voting arrangements, subsidy control and preparing and reviewing constitutions.

If you have any queries about what is discussed in this insight and the impact on your organisation, please speak to Tiffany Cloynes to find out more about how Capsticks can help.