Mayors to score wins in the budget after PM intervenes – but fears remain over councils facing bankruptcy
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.
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
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.
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.”
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.”
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.
When I got to Chequers on Sunday, the prime minister had clearly been up for most of the night and hitting the phones all morning with calls to fellow leaders in Europe and the Middle East, as he and others scrambled to try to contain a very dangerous situation.
His primary message was to try to reassure the public that the UK government was working to stabilise the region as best it could and press for a return to diplomacy.
But what struck me in our short interview was not what he did say but what he didn’t – what he couldn’t – say about the US strikes.
It was clear from his swerve on the question of whether the UK supported the strikes that the prime minister neither wanted to endorse US strikes nor overtly criticise President Donald Trump.
Follow latest: Trump hails ‘bullseye’ strikes on Iran
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Starmer reacts to US strikes on Iran
Instead, his was a form of words – repeated later in a joint statement of the E3 (the UK, Germany and France) – to acknowledge the US strikes and reiterate where they can agree: the need to prevent Iran having a nuclear weapon.
He also didn’t want to engage in the very obvious observation that President Trump simply isn’t listening to Sir Keir Starmer or other allies, who had been very publicly pressing for de-escalation all week, from the G7 summit in Canada to this weekend as European countries convened talks in Geneva with Iran.
Donald Trump and Sir Keir Starmer at the G7 in Canada last week. Pic: Reuters
It was only five days ago that the prime minister told me he didn’t think a US attack was imminent, when I asked him what was going on following President Trump’s abrupt decision to quit the G7 early and convene his security council at the White House.
When I asked him if he felt foolish or frustrated that Trump had done that and didn’t seem to be listening, he told me it was a “fast moving situation” with a “huge amount of discussions in the days since the G7” and said he was intensely pressing his consistent position of de-escalation.
What else really could he say? He has calculated that criticising Trump goes against UK interests and has no other option but to press for a diplomatic solution and work with other leaders to achieve that aim.
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What is Operation ‘Midnight Hammer’?
Before these strikes, Tehran was clear it would not enter negotiations until Israel stopped firing missiles into Iran – something Israel is still saying it is not prepared to do.
The US has been briefing that one of the reasons it took action was because it did not think the Iranians were taking the talks convened by the Europeans in Geneva seriously enough.
It is hard now to see how these strikes will not serve but to deepen the conflict in the Middle East and the mood in government is bleak.
Iran will probably conclude that continuing to strike only Israel in light of the US attacks – the first airstrikes ever by the US on Iran – is a response that will make the regime seem weak.
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What next after US-Iran strikes?
Read more:
Iran may not have lost its ability to make a nuclear bomb
Analysis: Iran may decide killing Americans is best way to retaliate
But escalation could draw the UK into a wider conflict it does not want. If Iran struck US assets, it could trigger Article 5 of NATO (an attack on one is an attack on all) and draw the UK into military action.
If Iran chose to attack the US via proxies, then UK bases and assets could be under threat.
The prime minister was at pains to stress on Sunday that the UK had not been involved in these strikes.
Meanwhile, the UK-controlled airbase on Diego Garcia was not used to launch the US attacks.
There was no request to use the Diego Garcia base, the president moving unilaterally, underlining his disinterest in what the UK has to say.
The world is waiting nervously to see how Iran might respond, as the PM moves more military assets to the region while simultaneously hitting the phones.
The prime minister may be deeply opposed to this war, but stopping it is not in his gift.
UK
GPs can prescribe weight loss jabs on the NHS from today – but strict eligibility criteria in place
GPs will be able to prescribe weight loss jabs on the NHS from today.
About 220,000 people with the “greatest need” are set to receive Mounjaro – with strict criteria for the first year of the rollout.
Initially, only those with a body mass index of over 40 who have at least four other health problems linked to obesity will be eligible.
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Can you get pregnant when on weight loss drugs?
Some doctors have raised concerns about the additional workload this new programme will bring, while pharmacists fear it could lead to supply shortages.
While an estimated 1.5 million people are now taking weight loss drugs across the UK, they could previously only be accessed through specialist services or private prescriptions.
Dr Claire Fuller from NHS England said: “We urgently need to address rising levels of obesity and prioritise support for those who are experiencing severe ill health – and greater access to weight loss drugs will make a significant difference to the lives of those people.”
She added: “While not everyone will be eligible for weight loss drugs, it’s important that anyone who is worried about the impact of their weight on their health discusses the range of NHS support available with their healthcare professional.”
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Weight loss drugs ‘changing way we see obesity’
The chairwoman of the Royal College of GPs welcomed NHS England’s decision to pursue a phased rollout, and said current workloads must be factored in to ensure the jabs can be prescribed safely.
Professor Kamila Hawthorne went on to say: “While weight loss medications have a lot of potential benefits for patients who are struggling to lose weight and who meet all the clinical criteria for a prescription, they mustn’t be seen as a ‘silver bullet’ to aid weight loss.
“We also need to see a focus on prevention, stopping people becoming overweight in the first place so they don’t require a medical intervention later.”
Read more from Sky News:
UK and NATO allies to boost defence spending
Analysis: Will Russia and China back Iran?
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‘How I tried to get weight loss drugs’
Her remarks were echoed by the National Pharmacy Association’s chairman Olivier Picard, who says “prescribing these medications alone misses the point”.
He argued that they need to be part of a comprehensive strategy that includes lifestyle coaching, exercise and nutritional guidance – but many GPs currently “lack the bandwidth” to provide this support.
“As a result, we could end up in a situation where patients are prescribed the medication, lose weight, and then experience rebound weight gain once the course ends – simply because the foundational lifestyle changes weren’t addressed,” Mr Picard added.
Estimates suggest about 29% of the adult population is obese.
Health Secretary Wes Streeting says the government “is determined to bring revolutionary modern treatments to everyone who needs them, not just those who can afford to pay”.
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