The Treasury has set out a timetable for devolving revenue to England’s mayoral strategic authorities, with business-rates sharing from 2027 and income-tax assignment from 2028. In London, the prospect of retaining more locally raised money has been welcomed by the Mayor and London Councils, which wants boroughs to have a formal say in funding decisions.
The Fiscal Devolution Roadmap states that income-tax assignment is to be implemented from 2028. Separately, the Budget document says mayors will retain a 20% share of locally retained business rates from 2027, with fiscal-devolution baselines to be set at the 2027 Spending Review.
Those provisions establish different starting dates for the two revenue measures. The business-rates percentage applies specifically to locally retained business rates, while the precise amount of income-tax revenue that mayors will receive remains unknown, according to independent analysis by the Institute for Fiscal Studies.
Potential support for London infrastructure
In a statement on 28 October, the Mayor of London said the measures could enable the capital to keep more of the money raised locally. The statement identified the West London Orbital, Bakerloo Line Extension and Euston knowledge-quarter project as infrastructure that could be unlocked.
The Mayor’s statement presented those schemes as potential beneficiaries of fiscal devolution, rather than announcing funding for them. It did not say that any of the three projects was funded or construction-ready. The distinction leaves the revenue proposals separate from decisions needed to turn potential support into a funded project.
London Councils also welcomed the Budget mechanisms in its response on 28 October. It described them as support for the Bakerloo extension and West London Orbital, as well as upgrades to Stratford International and Euston.
The two statements therefore overlap on the Bakerloo and West London Orbital schemes, but their references to other infrastructure are not identical. The Mayor identified the Euston knowledge-quarter project, while London Councils referred to upgrades to Euston and Stratford International. Neither response establishes that the roadmap itself funds the projects named.
Boroughs seek a formal role
Alongside its welcome for the measures, London Councils said boroughs needed to be equal partners in decisions on devolved funding. It called for them to have a formal say alongside the Mayor, making borough participation a distinct part of its response to the proposed revenue arrangements.
That position concerns how funding decisions would be made, rather than simply which infrastructure might benefit. London Councils’ response supports the Budget mechanisms while also seeking a role for boroughs in their use. Its call for equal partnership is not, in itself, confirmation that such a decision-making arrangement has been agreed.
The scale and detailed operation of the wider funding system also remain unsettled. The Institute for Fiscal Studies said the precise amount of income-tax revenue for mayors and the detailed operation of the system were still unknown, with much of the detail awaiting the next Spending Review.
The 2027 Spending Review is consequently an important point in the published timetable: the Budget says fiscal-devolution baselines will be set then. That sits alongside the stated start of business-rates sharing in 2027 and precedes the roadmap’s implementation date for income-tax assignment in 2028.
For London, the measures set out a future route to retaining more locally raised revenue, but not a settled funding package for the infrastructure highlighted. The amount of income-tax revenue, the system’s detailed operation and the boroughs’ requested formal role remain distinct from the dates and business-rates share already specified.
