Burnham pledges £285m for councils and more local control over investment

£285m in government funding has been promised to help struggling councils in 2027, alongside plans to give local leaders greater control over investment decisions.

Prime Minister Andy Burnham pledged to end councils’ ‘cap in hand’ dependence on Whitehall. The government describes the money as ‘transitional seed funding’.

The announcement comes as Bury Council seeks bailout funding to balance its books. Stockport Council has requested £40m from the government over two years to meet potential budget shortfalls.

Greater Manchester Combined Authority has already offered all ten borough councils interest-free loans to meet funding gaps.

Borrowing and investment powers

Chancellor John Healey is due to set out the plans in his Budget speech on Wednesday 28 October. Local authorities would have greater freedom to decide where to invest.

The government also plans to work with mayors on a £1.5bn borrowing facility from 2028. This would provide capital for local investment priorities.

A further £150m will go to strategic authorities in 2027 to help them take on new powers and manage investment programmes and complex projects.

The measures follow pressure on council services since austerity began in 2010, with reduced government grants and above-inflation council tax increases.

Greater Manchester model

The government pointed to Greater Manchester’s approach to attracting private investment into housing and other projects.

Greater Manchester Mayor Bev Craig said the Good Growth Fund had approved more than £1bn of investment during its first year, with projects in every borough.

She said this included support for 5,600 new homes, town centre redevelopment in Oldham and Wythenshawe, and more than 2.3 million sq ft of employment and innovation space, including QIAGEN’s new campus.

Housing Secretary Angela Rayner said the wider changes would support locally decided housing, transport and regeneration schemes.