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Mayors are set to be one of the big winners in the budget after Sir Keir Starmer personally intervened to ensure they have more freedom to spend cash and boost growth, Sky News understands.

England’s dozen metro mayors have been working together to push the prime minister, Rachel Reeves and Angela Rayner for more powers and cash after years of frustration at the way the Treasury allocates money for projects and salaries.

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

There is agreement among all the mayors who spoke to Sky News that the squeeze on local government budgets – which metro mayors work alongside – will cause further councils to go bankrupt and hamper their ability to regenerate their local regions.

The Budget - a special programme on Sky News

In the budget on Wednesday mayors believe they will get:

  • A so-called “single pot” of money allowing them much greater freedom to allocate funds where they deem most necessary;
  • Greater flexibility to raise local taxes. In Liverpool City Region, metro mayor Steve Rotherham is pushing a “tourist tax” of £1 per night on the city’s hotels to fund local tourist projects. There are hopes among some mayors they will get more flexibility in the way they can spend locally raised taxes, known as precepts;
  • Multi-year budget settlements to allow for longer-term planning.
  • The mayors are pushing for more powers in a range of areas from transport, where they are hopeful of some success, to skills, where they see the Department for Education reluctant to release their grip.

Sky News understands that Sir Keir has repeatedly said in meetings that he believes metro mayors, who have planning powers and work with clusters of local authorities, must be put at the heart of the push for growth across England.

‘Massively frustrating’ Treasury

More on Budget 2024

Undated handout photo issued by Tees Valley Combined Authority of Tees Valley Mayor Ben Houchen, as a £4 billion project to build an industrial-scale carbon capture, utilisation and storage (CCUS) facility in north-east England has been approved by the Government. Pic: PA
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Mayor of Teesside Ben Houchen. Pic: PA

Liverpool City Mayor Mr Rotherham told Sky News that he has been told that mayors “can become the delivery arm of national government” across a whole range of projects, including retrofitting homes, improving transport and productivity and skills.

However, several mayors who spoke to Sky News sounded a warning that they need to break free from the Treasury’s way of deciding what should get funded if growth is as big a priority as the government says.

Metro Mayor of the Liverpool City Region Steve Rotheram in Liverpool ahead of the start of the Labour Party conference. Pic: PA
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Liverpool City Mayor Steve Rotherham. Pic: PA

Mr Rotherham said the Treasury has been “massively frustrating to date” and “we are pushing to see changes.”

He called for urgent reform to the Treasury manual for evaluating the value for money of big projects – known as the Treasury Green Book.

He claimed that this way of measuring value is biased against more long-term projects, making true reform impossible.

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Sam Coates looks ahead to Westminster’s oddest budget tradition

Councils ‘on the brink of bankruptcy’

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

“The officials, I think, have a very narrow view – they know the cost of everything and the value of nothing.”

He warned the chancellor that if, as expected, she announces lots of big infrastructure and growth projects on Wednesday but also squeezes on the day-to-day running costs of government, then the initiatives unveiled next week may never happen.

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

“But to deliver that, you’ve got to have the day-to-day spending to employ people, get through planning – all of that stuff in the background that takes money, revenue, day-to-day spending.

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

Prime Minister Keir Starmer shakes hands with Tees Valley Mayor Ben Houchen (second right) as he meets regional Mayors and leaders from across the UK during the Council of the Nations and Regions in Edinburgh, the first gathering for metro mayors and first ministers of devolved administrations. Pic: PA
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Earlier this month Sir Keir Starmer met Tees Valley Mayor Mr Houchen (second right) and other regional leaders during the inaugural Council of the Nations and Regions in Edinburgh. Pic: PA

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

“You’ve got local councils, which is what most people interact with on a daily basis, in a very difficult situation.

“The quality and experience of the staff aren’t there. Money is extremely tight.

“Things like adult and children social services in Tees Valley for instance usually accounts for about 80% of a council’s entire budget, just on adult and children’s social services. So it’s in a very difficult state. I’m acutely aware, not just across the Tees Valley but across the country, there are lots of councils on the brink of bankruptcy.

“You’ve seen a couple of those already under the previous government. Without more revenue funding and funding for the types of departments like local government, that’s not going to change that outcome, and we could still see loads of capital spending, but we could still see governments going bust, services not improving and actually continuing to deteriorate.”

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If councils fail, communities ‘fall over’

Richard Parker, the new Labour mayor of the West Midlands, also agreed funding was squeezed for councils.

“Birmingham has lost £1bn worth of funding over the last 10 years… that’s been taken out of some of the poorest and most vulnerable communities, and it’s made those communities even more vulnerable.

“And I can’t afford our councils to fail because if our councils fail, the communities they support fall over.

“So I understand the criticality of the situation.

“I’m hoping the government will start, as they’ve been saying, to make longer plans for funding for local government, so they get an opportunity to plan ahead and plan for the future rather than working to short-term budgetary cycles of a year.”

Prime Minister Sir Keir Starmer and Mayor of West Midlands Richard Parker (left) during a meeting with English regional mayors, at No 10 Downing Street in Westminster, central London. Picture date: Tuesday July 9, 2024.
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Sir Keir also met regional mayors, including West Midlands Mayor Richard Parker (left), in July. Pic: PA

Mr Parker made clear that getting more powers over skills – which some other mayors think unlikely at the moment – will be a key driver for growth.

Read more:
Analysis: Growing storm over rumoured budget tax rises

Analysis: Labour’s muddle with messaging
Are Starmer and Reeves on the same page with budget?

‘Too many people in low-paid jobs’

“I actually then need some revenue support, some more powers over particularly post-16 education,” he said.

“We’ve got around a quarter of the workforce in the West Midlands with low skills in those skills, which means that too many people in work are in low-paid jobs.

“And I’ve got twice as many young people out of work than the national average.

“So I’ve got to help these people get access to the skills they need to build careers here and get access to better-paid jobs and indeed the jobs that investors need to fill who are coming into this region.”

Education Secretary Bridget Phillipson, deputy leader of Reform UK Richard Tice, former governor of the Bank of England Mervyn King, and director of the Institute for Fiscal Studies Paul Johnson will be on the Sunday Morning with Trevor Phillips show on Sky News from 8.30am this morning.

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Police search for missing sisters last seen three days ago near Aberdeen river

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Police search for missing sisters last seen three days ago near Aberdeen river

Specialist search teams, police dogs and divers have been dispatched to find two sisters who vanished in Aberdeen three days ago.

Eliza and Henrietta Huszti, both 32, were last seen on CCTV in the city’s Market Street at Victoria Bridge at about 2.12am on Tuesday.

The siblings were captured crossing the bridge and turning right onto a footpath next to the River Dee in the direction of Aberdeen Boat Club.

Henrietta Huszti. Pic: Police Scotland
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Henrietta Huszti. Pic: Police Scotland

Eliza Huszti. Pic: Police Scotland
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Eliza Huszti. Pic: Police Scotland

Police Scotland has launched a major search and said it is carrying out “extensive inquires” in an effort to find the women.

Chief Inspector Darren Bruce said: “Local officers, led by specialist search advisors, are being assisted by resources including police dogs and our marine unit.”

Aberdeenshire Drone Services told Sky News it has offered to help in the search and is waiting to hear back from Police Scotland.

The Huszti sisters. Pic: Police Scotland
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CCTV of the sisters. Pic: Police Scotland

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The sisters, from Aberdeen city centre, are described as slim with long brown hair.

Police said the Torry side of Victoria Bridge where the sisters were last seen contains many commercial and industrial units, with searches taking place in the vicinity.

The force urged businesses in and around the South Esplanade and Menzies Road area to review CCTV footage recorded in the early hours of Tuesday in case it captured anything of significance.

Drivers with relevant dashcam footage are also urged to come forward.

CI Bruce added: “We are continuing to speak to people who know Eliza and Henrietta and we urge anyone who has seen them or who has any information regarding their whereabouts to please contact 101.”

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Britain’s gas storage levels ‘concerningly low’ after cold snap, says owner of British Gas

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Britain's gas storage levels 'concerningly low' after cold snap, says owner of British Gas

Britain’s gas storage levels are “concerningly low” with less than a week of demand in store, the operator of the country’s largest gas storage site said on Friday.

Plunging temperatures and high demand for gas-fired power stations are the main factors behind the low levels, Centrica said.

The UK is heavily reliant on gas for its home heating and also uses a significant amount for electricity generation.

As of the 9th of January 2025, UK storage sites are 26% lower than last year’s inventory at the same time, leaving them around half full,” Centrica said.

“This means the UK has less than a week of gas demand in store.”

The firm’s Rough gas storage site, a depleted field off England’s east coast, makes up around half of the country’s gas storage capacity.

Gas storage was already lower than usual heading into December as a result of the early onset of winter.

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Combined with stubbornly high gas prices, this has meant it has been more difficult to top up storage over Christmas.

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UK’s first taxpayer-funded injection room to open in radical move to tackle drugs epidemic

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UK's first taxpayer-funded injection room to open in radical move to tackle drugs epidemic

Glasgow has been a city crying out for solutions to a devastating drugs epidemic that is ravaging people hooked on deadly narcotics. 

We have spent time with vulnerable addicts in recent months and witnessed first-hand the dirty, dangerous street corners and back alleys where they would inject their £10 heroin hit, not knowing – or, in many cases, not caring – whether that would be the moment they die.

“Dying would be better than this life,” one man told me.

It was a grim insight into the daily reality of life in the capital of Europe’s drug death crisis.

Scotland has a stubborn addiction to substances spanning generations. Politicians of all persuasions have failed to properly get a grip of the emergency.

But there is a new concept in town.

From Monday, a taxpayer-funded unit is allowing addicts to bring their own heroin and cocaine and inject it while NHS medical teams supervise.

A dirty needle thrown less than 100 metres from the new injection centre
Image:
A dirty needle thrown less than 100 metres from the new injection centre

It may be a UK-first but it is a regular feature in some other major European cities that have claimed high success rates in saving lives.

Glasgow has looked on with envy at these other models.

One supermarket car park less than a hundred metres from this new facility is a perfect illustration of the problem. An area littered with dirty needles and paraphernalia. A minefield where one wrong step risks contracting a nasty disease.

Drugs paraphernalia in a supermarket car park in Glasgow, near the new facility
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Drugs paraphernalia in a supermarket car park in Glasgow, near the new facility

It is estimated hundreds of users inject heroin in public places in Glasgow every week. HIV has been rife.

The new building, which will be open from 9am until 9pm 365 days a year, includes bays where clean needles are provided as part of a persuasive tactic to lure addicts indoors in a controlled environment.

There is a welcome area where people will check in before being invited into one of eight bays. The room is clinical, covered in mirrors, with a row of small medical bins.

Clean needles are provided to lure addicts to inject in a controlled environment
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Clean needles are provided to lure addicts to inject in a controlled environment

One of the eight bays users can inject in
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There are eight bays users can inject in

We were shown the aftercare area where users will relax after their hit in the company of housing and social workers.

The idea is controversial and not cheap – £2.3m has been ring-fenced every year.

The aftercare area
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The aftercare area

Read more: ‘Dying would be better than my £1,000 a month heroin addiction’

Authorities in the city first floated a ‘safer drug consumption room’ in 2016. It failed to get off the ground as the UK Home Office under the Conservatives said they would not allow people to break the law to feed habits.

The usual wrangle between Edinburgh and London continued for years with Downing Street suggesting Scotland could, if it wanted, use its discretion to allow these injecting rooms to go ahead.

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The stalemate ended when Scotland’s most senior prosecutor issued a landmark decision that it would not be in the public interest to arrest those using such a facility.

One expert has told me this new concept is unlikely to lead to an overall reduction in deaths across Scotland. Another described it as an expensive vanity project. Supporters clearly disagree.

The question is what does success look like?

The big test will be if there is a spike in crime around the building and how it will work alongside law enforcement given drug dealers know exactly where to find their clients now.

It is not disputed this is a radical approach – and other cities across Britain will be watching closely.

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