Mayors are set to be one of the big winners in the Budget after Sir Keir Starmer’s personal intervention to ensure they have more freedom to spend money and drive growth, according to Sky News.

England’s dozen metropolitan region mayors worked together to push the Prime Minister, Rachel Reeves and Angela Rayner for more powers and cash after years of frustration with how the Treasury allocates money to projects and salaries.

But there is deep concern that Ms Reeves, the chancellor, may allocate money only to some key areas and not others.

All the mayors who spoke to Sky News agree that squeezing local government budgets – which metro mayors work with – will bankrupt other councils and hamper their ability to regenerate their local areas.

In the budget Wednesday the mayors think they will obtain:

• A “single pot” of money allowing them much greater freedom to allocate funds where they deem it most necessary;
• Greater flexibility to increase local taxes. In the Liverpool City Region, Metropolitan Mayor Steve Rotherham is proposing a £1 per night “tourist tax” on hotels in the city to fund local tourism projects. Some mayors hope to have more flexibility in how they can spend local taxes, known as precepts;
• Multi-year budget regulations to enable longer-term planning.
• Mayors are pushing for more powers in a range of areas, from transport, where they hope for some success, to skills, where they see the Department for Education reluctant to loosen its grip.

Sky News understands that Sir Keir has repeatedly told meetings that he believes metro mayors, who have planning powers and work with groups of local authorities, must be placed at the heart of the growth drive across England.

“Extremely frustrating” treasure

Liverpool City Mayor Mr Rotherham told Sky News he had been told mayors “could become the implementing body of national government” for a range of projects, including the refurbishment of housing, improved transport, productivity and skills.

However, several mayors interviewed by Sky News warned they must break free from how the Treasury decides what should be funded if growth is as important a priority as the Government claims.

Mr Rotherham said the Treasury has been “extremely frustrating so far” and “we are pushing to see changes”.

He called for urgent reform of the Treasury manual intended to assess the value for money of major projects – known as the Treasury Green Book.

He said this way of measuring value is biased against longer-term projects, making real reform impossible.

Municipalities “on the verge of bankruptcy”

Meanwhile, Ben Houchen, the Conservative mayor of Teesside, said: “The Treasury is a very difficult department to manage.

“I think those in charge have a very narrow vision: they know the price of everything and the value of nothing.”

He warned the chancellor that if, as expected, she announces many major infrastructure and growth projects on Wednesday, but also cuts the government’s day-to-day running costs, then the initiatives unveiled next week may never come to fruition.

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“If you allocate money to big projects like train stations or roads or whatever, big infrastructure, that’s one thing,” he said.

“But to achieve that, you have to have the day-to-day expenses to employ people, to successfully plan – all that in the background that requires money, income, day-to-day expenses.

“So allocating a big check is one thing. It doesn’t necessarily mean we’re going to see these projects come to fruition if the money isn’t there to develop these projects in the first place.”

Mr Houchen said local councils in the Tees Valley were in a bad financial situation.

“There are local councils, which most people interact with on a daily basis, in a very difficult situation.

“The quality and experience of the staff is not there. Money is extremely tight.

“Adult and children’s social services in Tees Valley, for example, typically make up around 80% of a council’s total budget, just for adult and children’s social services. So it’s a very difficult situation. I’m totally fine with that. aware, not just across the Tees Valley, but across the country, many municipalities are on the brink of bankruptcy.

“You already saw some under the previous government. Without more revenue and funding for types of departments like local government, it won’t change that outcome, and we could still see a lot of capital spending, but We could still see governments go bankrupt, services fail to improve and continue to deteriorate.”

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If councils fail, communities “collapse”

Richard Parker, the new Work Mayor of the West Midlands, also agreed that funding for councils had been cut.

“Birmingham has lost £1 billion in funding over the last 10 years… which has been taken away from some of the poorest and most vulnerable communities, and this has made these communities even more vulnerable.

“And I can’t allow our councils to fail, because if our councils fail, the communities they support collapse.

“So I understand the criticality of the situation.

“I hope that the Government will start, as they have said, to develop longer term plans for local government funding, so that they have the opportunity to plan ahead and plan for the future. “future rather than working on short-term budget cycles one year.”

Mr Parker made clear that gaining more powers over skills – something some other mayors say is unlikely at the moment – would be a key driver of growth.

Learn more:
Analysis: growing storm following rumors of budgetary tax increases
Analysis: Labor’s confusion with messages
Are Starmer and Reeves on the same page when it comes to budgets?

“Too many people work in poorly paid jobs”

“In fact, then I need financial support, more powers, especially in education after 16,” he said.

“We have around a quarter of the workforce in the West Midlands with low skills in these areas, meaning too many of the people in work are in low-paid jobs.

“And I have twice as many unemployed young people as the national average.

“So I need to help these people access the skills they need to build a career here and access better-paying jobs and even the jobs that investors need to fill when they come to this region.”