Combined Authorities: Income Tax
The question
To ask the Chancellor of the Exchequer, with reference to the 10 Downing Street press release entitled PM hands mayors share of income tax to make lives better in every postcode, published on 30 July 2026, what is the aggregate amount of receipts from income tax that will be given to mayoral combined authorities; and what is the estimated amount of income tax revenue per combined authority.
Answered by Ministry of Housing, Communities and Local Government
As set out in the ‘Rewiring the State’ Cabinet Statement, the government will replace grants from central government with a share of local income tax for every mayor beginning in 2028, such that where a region grows its tax base, it benefits from the increased receipts.
The long-term certainty of funding via taxation will provide more flexibility and enable greater investment to fund interventions that will deliver a return. We will consider how these growth incentives can be balanced with the need for fairness between places, recognising that there will be different starting points across the country.
We will set out our overall approach to revenue assignment and rates retention in the fiscal devolution roadmap which will be published at Budget 2026 and use the upcoming Spending Review to confirm the detailed arrangements for retained income tax, with receipts retained locally from April 2028.
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