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.
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
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Image: 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.
Image: 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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1:56
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.”
Image: 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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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.”
Image: 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.
“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.
The Appeal Court judge who ruled in favour of Home Secretary Yvette Cooper in the Epping migrant hotel case is a long-standing Labour supporter.
Lord Justice David Bean, 71, is a former treasurer of the Society of Labour Lawyers and chaired the left-leaning Fabian Society, which is affiliated to the Labour Party, in 1989 and 1990.
He was also – with Sir Tony Blair’s barrister wife Cherie – a founder member in 2000 of the left-wing Matrix Chambers, whose members include the current attorney general, Lord Hermer.
Image: The Bell Hotel in Epping, Essex, is at the centre of a legal battle. Pic: PA
On its website, the Society of Labour Lawyers describes itself as “a thinktank and affiliated socialist society which provides legal and policy advice to the Labour Party”.
Founded in 1948 by a future Labour lord chancellor Gerald Gardiner, it declares: “Our objectives are to contribute legal expertise to the Labour Party and uphold the principles of justice, liberty, equality, and the rule of law in the UK and around the world.
“We advise Labour MPs and the House of Lords; develop and scrutinise policy and legislation; contribute to debate within the Labour movement by hosting events and discussions; and mentor future members of the legal profession.
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“We are open to Labour Party members who are also practising or retired lawyers, law students or graduates, academics, and members of the judiciary.”
The Fabian Society describes itself as “a democratically governed socialist society, a Labour affiliate and one of the party’s original founders”.
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5:00
Inside the asylum hotel protests
Sir Stephen Eyre, the High Court judge who ruled in favour of Epping Forest Council earlier this month, was a Conservative parliamentary candidate four times.
His most high-profile bid to become an MP came in the 2004 Birmingham Hodge Hill by-election, won by current Labour MP and former minister Liam Byrne.
Image: Sir Stephen Eyre. Pic: Judicial Appointments Commission/Ministry of Justice
Appointed a High Court judge by then Lord Chancellor Dominic Raab in 2021, Sir Stephen was a Tory candidate while working as a barrister.
His first attempt came in 1987, when he stood in Hodge Hill in that year’s general election, coming second behind Labour’s Terry Davis.
Then in 1992, the year of Sir John Major’s 21-seat election victory, he stood for the Northern Ireland Conservatives in the unionist stronghold of Strangford.
Mr Eyre, as he then was, came fourth behind the official Unionists’ John Taylor, with current Democratic Unionist MP for Antrim East Sammy Wilson in second place.
In 2001, he stood in Stourbridge, where he again came second, this time to Labour’s Debra Shipley, when he cut her majority from nearly 6,000 to under 4,000.
And in the 2004 by-election, he came a distant third as Mr Byrne scraped in by just 460 votes ahead of the Liberal Democrats, who benefited from an Iraq war backlash.
“It’s an invasion,” Dinah Bentley tells me, standing next to a cardboard cut-out of Nigel Farage.
The 78-year-old retired teacher says she “doesn’t laud” the Reform MP, whose grinning likeness is a permanent fixture in her West Yorkshire conservatory, but he “says what I believe”.
“Everybody talks about migration, but our country’s ruined,” Dinah adds. “They’ve ruined it.”
The “they” in her mind? People who have crossed into the UK on small boats.
We have seen asylum hotel protests intensify over the summer and wanted to speak to the people who’ve joined them.
Over the coming weeks, we’ll speak with counter-protesters too, but today, we meet Dinah, a grandmother of two who has joined those calling on asylum hotels to close.
Image: Dinah says she fears for her granddaughters’ safety
She was, like many of the protesters we met, initially sceptical to speak to a journalist.
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Dinah says she “doesn’t watch mainstream news” because of “media lies” over Brexit.
Instead, she says she gets her news from social media.
It was on social media that Dinah learnt about a protest being organised outside a hotel in Wakefield, which has housed asylum seekers for several years.
It was the first migration-related protest she had ever attended.
“We’ve put up with so much for so long and I think ordinary people now, they’ve decided it’s no good sitting, doing nothing,” Dinah says.
After reading about a male asylum seeker being charged with a sexual assault in Epping, she says she is “fearful” for her granddaughters’ safety.
“They’re undocumented,” she says, referring to those who have arrived in the UK on small boats.
“We know nothing about them. We don’t know where they are wandering the streets. It’s not right, is it?”
She’s also angry about the cost of housing asylum seekers in hotels.
Image: Dinah says Nigel Farage ‘says what I believe’
I ask Dinah what she thinks about the government plan to close asylum hotels, stop illegal crossings and deport people who do not have a legal right to remain.
“It’s all talk, all talk”, she says. “I don’t believe them.”
“I would be happy if the Navy went into the Channel, we’re an island for God’s sake, and stopped the boats.
“That would make me over the moon.”
Dinah tells us people used to be “afraid” of saying what they really thought about migration.
No more, she says.
The ‘migrant watch’ group
On the other side of Wakefield, we meet 47-year-old James Crashley.
He’s also been to the local asylum hotel protests.
An army veteran and former policeman, James says he does not think asylum seekers should be housed in hotels or houses of multiple occupancy.
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1:48
Where are UK’s asylum seekers from?
Image: James has been trying to set up a ‘community watch’
“I’ve served in Kosovo and in Iraq, within the British Army,” he says. “And if I can be housed in a tent for six months, then they can too.”
The prime minister has pledged to end the “costly use of hotels to house asylum seekers in this parliament” – which would be 2029, if not earlier.
James has, by his own admission, become somewhat notorious in his local area for trying to set up what he’s called a “community watch”.
He says the police are “very good at dealing with serious crime” but believes “they seem to forget that day-to-day crime exists”.
Image: James stresses the group ‘isn’t vigilantism’
Called “5 Town Migrant Watch” and advertised by him on social media, James says the volunteer group will support the Wakefield hotel protests and act as a “gentle presence” in public areas to tackle “all anti-social behaviour”.
But it will focus on “illegal migrant men” who James describes as having “conflicting traditions and cultures”.
“They come from cultures that aren’t as civilised as ours,” he says. “They don’t seem to adhere to our laws.
“And because of the cultural differences, as in the sexual assaults on children and women, they believe that’s fine in their cultures. Well, it’s not here.”
I say to James that no culture accepts sexual assaults on women and children are “fine”, a point he says he “accepts”.
But he claims that, by definition, people have already “broken the law” when they arrive on small boats in the first place.
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James’ group has attracted hundreds of supporters online, but also criticism from people who believe the group – and James himself – is not only divisive but dangerous.
James admits he has previously had a police caution for a public order offence, not related to the community watch, but stresses this group “isn’t vigilantism”.
“It’s a peaceful movement,” he says. “But if needs be, we’ll stand our ground and will prevent crime. We’re not allowed to commit crime.”
‘People are angry’
A few days later, we meet Dinah again outside the Cedar Court Hotel in Wakefield.
Protesters line the road, waving Union and St George’s flags. Some are shouting “send them back” and “stop the boats”.
Image: The protesters and counter-protesters
Groups of counter-protesters are there too, chanting “Nazi scum” over the police barricade.
I ask Dinah how that feels.
“I think it’s hilarious,” she says. “I know what I am, I don’t value their opinion, so I couldn’t care less what they call me.”
But standing next to Dinah, also waving a Union flag, is Sharon.
She says she’s “a little bit frightened being here” and feels it’s unfair to be put in that position just “to try and get the government to listen to you”.
She added: “I’m a 60-year-old mum. I work 40 hours a week. And nobody gives me anything free. You just want fairness.”
Image: Sharon says she wants ‘fairness’
In the crowd, we find James.
I ask him what he thinks about the government plan to appeal a court ruling to shut the asylum hotel in Epping.
“Of course they were going to try and block it,” he tells me.
Image: Dinah says she ‘doesn’t value’ the opinion of counter-protesters
“The smiles here and the good attitude and the positivity is masking the anger of what’s happened to the English.
“People are angry. People know that once they’re out of here,” he says, gesturing at the hotel behind us, “they’re going to be put in the community”.
“What happens then, who knows?”
Dinah and James are among thousands of protesters who share a sense of being ignored by the government – leaving an overwhelming sense of pressure and uncertainty about what will happen next.
Foreign Secretary David Lammy confirmed the government had summoned Andrey Kelin in response.
Mr Kelin was seen arriving at the Foreign Office building in Whitehall today.
Image: Russian ambassador to the UK Andrey Kelin arrives at the Foreign Office building in Whitehall
Mr Lammy posted on X: “Putin’s strikes last night killed civilians, destroyed homes and damaged buildings, including the British Council and EU Delegation in Kyiv.
“We have summoned the Russian Ambassador. The killing and destruction must stop.”
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The British Council’s chief executive, Scott McDonald, said their guard for the building was injured but “stable”.
“At the insistence of my amazing colleagues, we will continue operations in Ukraine today wherever possible,” he said.
“Their resilience is awe-inspiring, and I am deeply thankful they are all safe.”
Earlier, Sir Keir Starmer said: “My thoughts are with all those affected by the senseless Russian strikes on Kyiv, which have damaged the British Council building.
“Putin is killing children and civilians, and sabotaging hopes of peace. This bloodshed must end.”
The British Council is an arms-length body from the government, and says its mission is to “support peace and prosperity by building connections, understanding and trust between people in the UK and countries worldwide”.
It facilitates schemes like working, living and learning abroad for British people.
Most of its funding comes from the fees it charges people for its services, but it does also get funding from the Foreign Commonwealth and Development Office (FCDO).
As well as the attack on the British Council building, Russia also targeted the EU delegation building in the Ukrainian capital overnight.
Ursula von der Leyen, the president of the European Commission, told reporters two missiles hit within 50 metres of the site in 20 seconds.
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2:17
Devastation in Kyiv after deadly Russian attack
And Kaja Kallas, the EU’s foreign policy chief, said the bloc was also summoning Russia’s ambassador following the strike.
“No diplomatic mission should ever be a target,” she said.
The attacks came as part of wider strikes on Kyiv, which destroyed homes and buildings and killed at least 15 people and injured 38, according to Ukrainian officials.
Russia has said it targeted military sites and air bases in its large overnight strike on Ukraine – and that it is still interested in negotiations to meet its aims.
“The special military operation continues,” he said, referring to Russia’s full-scale invasion of Ukraine, which it launched in February 2022.
“You see that strikes on Russian infrastructure facilities are also continuing, and often Russian civilian infrastructure is targeted by the Kyiv regime.”
He added: “At the same time, Russia will maintain its interest in continuing the negotiation process in order to achieve the goals we face through political and diplomatic means.”
Russia’s latest attack on Ukraine has been widely condemned, with Germany’s foreign minister Johann Wadephul saying there must be “consequences”.
“Last night we once again experienced in a terrible way how Russia attacked and bombed Kyiv, civilians died, children died, and the European Union delegation was also attacked,” he told reporters.
Mr Wadephul added that Germany wanted to show it was considering a further response and that any action would be taken jointly by the EU.
A Foreign Commonwealth and Development Office Spokesperson said: “The UK condemns in the strongest terms these outrageous attacks on Ukrainians and the damage done to the British Council and EU Delegation.
“Russia’s increasing attacks on Ukrainian civilians and cities, including Kyiv, are an escalation of the war and deeply irresponsible and are further sabotaging international peace efforts.
“We have made clear to the Russians that such actions will only harden UK and Western resolve to support Ukraine and bring an end to this unjustified war.
“Russia must stop this senseless killing and destruction immediately.”