Chancellor’s devolution plans a danger for rural areas

Government plans to allocate greater financial control to local mayors as part of its devolution policy in England spell danger for rural communities, which could be left behind.

That is the warning from rural campaign groups, who fear that local mayors will be biased towards their urban strongholds when it comes to spending their new-found wealth.

See also: Rural poverty in Britain: The crisis hiding in plain sight

The transfer of funding for things such as community spending and infrastructure projects was spelled out by chancellor John Healey in his Budget on Wednesday (28 October).

“For the first time I’m making the commitment that 100% of business rates will be retained locally by the end of the decade.

“So if local leaders help businesses start and grow, more of the rates they pay stay in that area,” he said.

“From next year, 20% of business rates revenue will go to mayors, and from 2028, a share of income tax receipts will go to mayors as well.”

Mr Healey said this would ensure that more power would rest in the hands of the local leaders “who know their areas best”.

Some £285m would also be made available next year for “good growth” funding of things like housing, transport and high streets, while the government will work with mayors to design a £1.5bn borrowing facility to help fund local infrastructure projects from 2028.

‘Left behind’ 

Policy campaign group Equal Ground fears authorities with large cities will gain the most, while rural areas will be left behind.

“Rural interests have been overlooked once again in the Budget,” said Equal Ground co-founder Richard Gueterbock.

“There was no mention of rural needs in the context of devolution and there is a real danger of a funding shift from rural to urban.

“If the government is serious about growth in every postcode, it needs to start including rural postcodes.”

Equal Ground points out that money is already being taken from rural councils, with the £110m a year Rural Services Delivery Grant ended in 2025 and the £143m Rural England Prosperity Fund closed in March 2026.

It estimates that rural county councils already face an estimated £2.7bn funding gap.

Campaign for the Protection of Rural England chief executive Roger Mortlock shared these concerns. 

“Devolution plans that give regional bodies more spending powers are welcome, but devolution must deliver for the countryside as well as for towns and cities,” he said.

“It’s great to see the language of builders and blockers abandoned, but communities need to be properly involved to avoid the countryside feeling like a dumping ground for new infrastructure.

“Rural postcodes also need agency and funding to back their ambitions.”