The UK government has announced plans to give regional mayors greater control over how tax revenue is spent in their areas, marking a significant shift in economic decision-making away from central government.
Chancellor Rachel Reeves confirmed that proposals, expected in the Autumn Budget, will allow local leaders to retain and allocate a share of nationally collected taxes. The aim is not to increase taxes, but to give regions more autonomy over how existing funds are used to drive local growth.
What Is Changing?
Under the proposed reforms:
Regional mayors could gain control over a portion of taxes such as income tax
Local leaders would decide how to reinvest this funding into their communities
The rollout is likely to begin in areas with strong governance and economic potential
This reflects a broader move towards devolution, where decision-making is pushed closer to local economies rather than being controlled centrally.
Why This Matters for Businesses
For businesses across the UK, especially SMEs, this could have real implications:
More targeted local investment
Funding could be directed into infrastructure, skills, and business support specific to regional needs
Greater alignment with local economic priorities
Regions may prioritise sectors that are strong locally, creating new opportunities
Potential policy variation across regions
Different areas may adopt different approaches, meaning businesses operating nationally will need to stay alert
In short, where your business is based could start to matter more than ever in terms of access to support and growth opportunities.
Wider Economic Strategy
This announcement sits within a broader government push to stimulate economic growth, including:
Increased investment in AI and quantum computing
Efforts to retain UK-based tech companies and talent
Closer economic alignment with the EU in key sectors such as manufacturing and food standards
At the same time, global pressures such as rising energy prices and geopolitical tensions remain key risks to the UK’s economic outlook.
1. Location starts to directly affect tax outcomes
Right now, tax is largely uniform. This shifts that.
Regions may influence how tax revenue is used locally
Over time, pressure builds for regional tax incentives or reliefs
Clients in “active” regions could benefit more than those in weaker ones
Implication:
Where your client operates could become a strategic decision, not just a logistical one.
2. More local funding, but harder to track
Devolved budgets usually mean:
More grants, schemes, and local business support
More variation and inconsistency between regions
More missed opportunities if you are not actively watching
Implication:
Most clients will not know what is available. That is your leverage.
If Amanah tracks this properly, you become the one telling clients:
“Here is £X you can access that your competitor doesn’t know about.”
3. Stronger regional growth pockets (and weak ones)
Money will not be spread evenly.
High-capacity regions (Manchester, West Midlands, etc.) will likely move faster
Others will lag due to weaker leadership or infrastructure
Implication:
Clients in growth regions:
More opportunity
More competition
Clients in weaker regions:
Fewer opportunities
Potential stagnation
You need to be honest with clients about this. Geography will matter more.
4. Property investors get a big shift
This is where it gets interesting for Amanah.
If mayors control spending:
Local infrastructure improves in targeted areas
Regeneration zones expand
Demand patterns shift
Implication for property clients:
New hotspots emerge earlier
Better capital growth opportunities if you get in early
Rental demand follows investment
If you are not advising on this, you are leaving serious value on the table.
5. More complexity
Devolution always creates:
More rules
More variation
More confusion
Implication:
Compliance becomes harder. Strategy becomes more valuable.
This is where Amanah either:
stays as a compliance accountant
or
becomes a strategic advisor tied to business growth
There is no middle ground long term.
Disclaimer
This article is for general informational purposes only and does not constitute financial, tax, or legal advice. The details outlined are based on government announcements and may be subject to change. Businesses should seek tailored professional advice before making any decisions based on these developments.