Regional leaders across England are poised to gain significantly greater control over public spending under new tax and fiscal reforms unveiled by the UK government, marking a decisive move away from decades of centralized economic management.

The plans, set out by Chancellor Rachel Reeves, would allow elected mayors to retain a share of national tax revenues, beginning with income tax, alongside expanded control over locally generated funds such as business rates.

The proposals are expected to be formally detailed in the upcoming autumn budget.

The initiative represents a structural shift in how public finances are distributed, with the Treasury aiming to give regions a direct financial stake in their own economic growth.

Under the model being developed, areas that generate stronger economic performance would be able to reinvest a portion of increased tax receipts locally, creating incentives for long-term development and investment.

In parallel, the government has announced new city investment funds worth approximately £2.3 billion, providing metro mayors with additional resources to support infrastructure, housing, and economic regeneration projects.

These funds are intended to complement the broader devolution of fiscal powers and enable local authorities to pursue tailored growth strategies.

Officials describe the reforms as a permanent transfer of authority rather than a temporary policy adjustment, designed to address longstanding regional disparities.

England has long been characterized by a high degree of centralization compared with other advanced economies, a factor widely seen as contributing to uneven economic outcomes between regions.

The proposals also build on earlier measures that expanded mayoral responsibilities in areas such as transport, skills, and housing.

By linking spending power more directly to local revenue generation, the government aims to create a more responsive and accountable system of regional governance.

While the approach has prompted debate over implementation and fiscal balance, it reflects a broader policy direction focused on decentralization and investment-led growth.

The Treasury has emphasized that the reforms will be structured to remain fiscally responsible, with no immediate increase in overall taxation levels.

Further details are expected later this year, including how revenue-sharing arrangements will be calculated and how the new powers will be phased in across England’s mayoral regions.