Mayors to score wins in the budget after PM intervenes – but fears remain over councils facing bankruptcy

Published

10 months ago

October 27, 2024

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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.

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

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.

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.

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.”

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.”

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.”

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.

‘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.”

Politics

US regulators release joint statement teasing 24/7 capital markets

Published

2 hours ago

September 5, 2025

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US regulators release joint statement teasing 24/7 capital markets

A 24/7 trading cycle would create new opportunities and risks for traditional financial markets that do not operate on nights and weekends.

Politics

Cabinet reshuffle: Who’s on Keir Starmer’s new team and who’s out?

Published

4 hours ago

September 5, 2025

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Cabinet reshuffle: Who's on Keir Starmer's new team and who's out?

Sir Keir Starmer is reshuffling his cabinet following Angela Rayner’s resignation after admitting she had not paid enough stamp duty on the purchase of a new home.

The prime minister’s former right-hand woman stepped down as deputy prime minister, housing secretary and deputy leader of the Labour Party after standards adviser Sir Laurie Magnus found she had breached the ministerial code.

Politics latest: Reshuffle after Rayner quits

She paid standard stamp duty on a flat she bought in Hove, East Sussex, in May after taking advice that it counted as her only home due to her disabled son’s trust owning the family home in Ashton-under-Lyne – but it was established she should have paid more.

Her resignation has left a hole around the cabinet table, which Sir Keir is now filling.

It was stressed early on Chancellor Rachel Reeves would remain as chancellor, in an attempt to stop the markets moving.

This is who is moving and where to:

David Lammy – foreign secretary to justice secretary and deputy PM

After flexing his diplomatic muscles with Donald Trump and his deputy JD Vance over the past year, Mr Lammy will now move to the justice brief.

The move is likely to be a blow as the PM had promised, most recently in November, he would be foreign secretary for the whole parliament until 2029.

Although he is no longer holding one of the four great offices of state, he has also been made deputy prime minister, presumably to soften the blow.

Mr Lammy is close to Sir Keir, both as a friend and in his next door constituency, and was seen grinning as he went into Number 10 after being appointed.

Yvette Cooper – home secretary to foreign secretary

The Labour stalwart had made tackling illegal migration a priority, so the move could be seen as a disappointment for her.

However, she remains in one of the four great offices of state – PM, chancellor, foreign and home.

Shabana Mahmood – justice secretary to home secretary

A big promotion, the straight-talking Labour MP will be tasked with tackling the small boats crisis and asylum seeker hotel protests.

She is no stranger to making difficult decisions, deciding to free criminals early to reduce prison overcrowding as justice secretary.

Her move makes it the first time all three great offices of state, after the prime minister, are held by women.

Pat McFadden – chancellor of the Duchy of Lancaster and intergovernmental minister to work and pensions secretary and head of “super ministry”

Often seen as Sir Keir’s “number two”, Mr McFadden will take over a newly formed “super ministry”.

It will include the department for work and pensions and the skills remit of the department for education – taking a large part of Education Secretary Bridget Phillipson’s brief and taking over from Liz Kendall as work and pensions secretary.

While it is not a promotion at first glance, it is a much wider role than he has had as chancellor of the Duchy of Lancaster – the highest-ranking Cabinet Office minister after the PM.

Darren Jones – chancellor of the Duchy of Lancaster

It is the second new job in the space of one week for the new chancellor of the Duchy of Lancaster. The close ally of the prime minister was promoted from chief secretary to the Treasury on Monday to chief secretary to the prime minister. And now he gets another new job.

Steve Reed – environment secretary to housing secretary

A promotion for the man who has consistently defended the government lifting inheritance tax relief on farmers.

He takes over one of the two major vacancies left by Ms Rayner and will have the massive task of building 1.5 million new homes during this parliament, as promised by the government.

Jonathan Reynolds – business and trade secretary to chief whip

A slightly odd move for the MP seen as a steady pair of hands in his business secretary role.

He takes over from Sir Alan Campbell and will now have to hustle Labour MPs to vote with the government – something that has sometimes proved difficult with the current cohort.

Mr Reynolds will also attend cabinet, as is necessary so he can liaise between the party and No 10.

Peter Kyle – science secretary to business and trade secretary

A promotion for Mr Kyle, who is taking over from Jonathan Reynolds.

He is seen as a rising star and impressed Labour MPs when he refused to stand down after suggesting Nigel Farage was on the side of people like Jimmy Savile by opposing the government’s online safety law.

Mr Kyle will be in charge of getting trade deals with other countries over the line.

Emma Reynolds – economic secretary to the Treasury to environment secretary

Probably the biggest promotion of the reshuffle, Ms Reynolds is taking on Mr Reed’s role after serving as a junior minister in the Treasury.

She will have to take on farmers and deal with the water companies – a big undertaking.

Liz Kendall – work and pensions secretary to science, innovation and technology secretary

Pat McFadden has taken her role as work and pensions secretary, while Ms Kendall takes over Peter Kyle’s brief.

He has made AI a major facet of his role so we will wait to see which direction Ms Kendall takes the job in.

Douglas Alexander – trade policy minister to Scotland secretary

A promotion for the Blair/Brown minister who returned to politics last year after being ousted in 2015 by then 20-year-old SNP MP Mhairi Black.

He takes over from Ian Murray, who has been removed from the cabinet.

Sir Alan Campbell – Chief whip to Lord President of the Council and leader of the House of Commons

An MP since 1997 and part of Tony Blair and Gordon Brown’s frontbench, Sir Alan is taking over Lucy Powell’s role.

He will be in charge of organising government business in the Commons – a sizeable job.

Who is out?

Lucy Powell has been sacked as leader of the House of Commons.

Ian Murray has been sacked as Scotland secretary.

Bridget Phillipson remains as education secretary but her brief has narrowed as Mr McFadden has taken over the skills part of her job.

Politics

Angela Rayner: The working-class mum who left school at 16 and became deputy PM

Published

5 hours ago

September 5, 2025

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Angela Rayner: The working-class mum who went from union rep to Labour big-hitter

Leaving school aged 16, pregnant and with no qualifications, Angela Rayner has had a meteoric rise to the second-highest office in the UK – and a spectacular fall from grace.

Sir Keir Starmer’s right-hand woman has now resigned after she admitted to Sky News political editor Beth Rigby she had not paid enough stamp duty on a second home she bought in Hove, East Sussex, earlier this year.

Politics latest: Angela Rayner resigns

Growing up in poverty on a council estate in Stockport, Greater Manchester, Angela Bowen (her maiden name) and her two siblings were brought up by her grandmother, as her mother had bipolar disorder. She has said they had no books because her mother could not read or write.

She left school at the age of 16, without any qualifications, after becoming pregnant and has said her son, Ryan, “saved me from where I could have been, because I had a little person to look after”.

The teenage mother, now 45, studied part-time and gained a qualification in social care, working for Stockport Council as a care worker.

She entered politics when she was elected as a Unison trade union representative and then convenor of Unison North West – the region’s most senior official, becoming a Labour Party member during her time there.

She married Unison official Mark Rayner in 2010 and they had two sons, Charlie and Jimmy. Charlie, now 17, was born at 23 weeks old and is disabled. It is the trust set up for him that meant she believed the Hove flat was not a secondary home so she did not have to pay more stamp duty on it.

In 2017, her eldest son Ryan had a son, making Ms Rayner a grandmother at the age of 37. She gave herself the nickname “Grangela”.

She and her husband separated in 2020 and their divorce was completed in 2023. Since 2022, she has been in a relationship with former Labour MP Sam Tarry, with a break in 2023.

NHS compensation and a trust

Days before her resignation, she revealed compensation was paid to Charlie by the NHS due to the circumstances around his birth, which left him with “life-long disabilities”.

A trust was set up to manage the compensation and to ensure her son was properly looked after, and so that he and his brother could remain living in their family home in Ashton-under-Lyne as part of a “nesting arrangement”, where children of divorced parents live in one house while parents take it in turn to stay there.

She said she sold her stake in that home to the trust in January this year and used that money as a deposit on the Hove flat.

The Labour MP said she was given legal advice that the coastal flat did not have to be considered as a second home for stamp duty but sought further legal counsel after media reports claimed she avoided £40,000 in stamp duty.

Her initial lawyers said they never gave her tax advice and said they were being made “scapegoats”.

Ms Rayner gave a tearful interview to Sky’s Beth Rigby before her resignation, telling the Electoral Dysfunction podcast she had spoken to her family about “packing it all in”.

MP to Labour deputy in five years

Ms Rayner rose up the Labour ranks quickly after becoming an MP for Ashton-under-Lyne in 2015.

She was made deputy Labour Party leader in 2020 and was made deputy prime minister and housing, communities and local government secretary after last summer’s general election.

A self-described socialist, “but not a Corbynite” (in her own words), she became well known for calling the Conservatives “scum”, for which she eventually apologised after initially refusing to.

Council house and donor controversies

During last summer’s election campaign, Ms Rayner was investigated by Greater Manchester Police over allegations she misled tax officials in the sale of her council house in 2015 under the right to buy scheme.

She was cleared of any wrongdoing and HMRC concluded she did not owe any capital gains tax. She accused the Tories of using “desperate tactics” against her and went on to win her seat with a 19.1% majority.

Not long after becoming deputy PM and housing secretary, she was embroiled in another scandal in which she was accused of failing to properly register her use of Labour peer Lord Waheed Alli’s $2.5m New York apartment and being given clothes worth £3,550 by him.

She later announced she would no longer accept clothes from donors.

Building pledge

One of the Labour government’s biggest pledges was to build 1.5m new homes in this parliament and, as housing secretary, this came under Ms Rayner’s remit.

Sir Keir admitted in December the pledge might be “a little too ambitious”.

Ms Rayner was warned by some of the UK’s biggest developers there was not enough skilled labour to get anywhere near that target, but she has insisted it will happen.

She also led the charge to overhaul planning rules, announcing planning officers would be able to rubberstamp development proposals without permission from council committees if they complied with locally agreed plans.

The changes will be made through the planning and infrastructure bill, which was introduced to parliament in March and is making its way through the Commons.

It also promises to unblock 150 infrastructure projects, such as gigafactories, windfarms and railways, while protecting the environment and nature by setting up a fund to help builders meet their environmental obligations faster by pooling contributions to fund larger nature protections

Right to buy

In February, somewhat controversially given she bought the council house she grew up in, Ms Rayner announced it would be harder for tenants to buy their own council homes to help reverse the housing stock shortage.

She also announced “Awaab’s Law” – introduced by the Conservatives in 2023 and named after two-year-old Awaab Ishak, who died from damp and mould – would come into force in October 2025, forcing social housing landlords to fix dangerous damp and mould in a set amount of time and emergency hazards within 24 hours.

In her role as deputy PM, Ms Rayner occasionally stood in for Sir Keir at Prime Minister’s Questions, one time facing Tory Oliver Dowden and saying it was the “battle of the gingers”.