The UK Budget 2026 signals a significant shift in the relationship between central and local government. The commitment to allow 100% retention of business rates locally by the end of the decade, alongside new powers over taxation and investment, represents one of the strongest endorsements yet of the principle that local growth is best driven locally.
For the Midlands, the opportunity is substantial. Businesses have long argued that decisions about infrastructure, regeneration, skills and economic development can often be made more effectively closer to the communities and business sectors they affect. Today’s announcements provide a clearer framework for making that happen.
The move towards 100% local retention of business rates has the potential to be transformative. It creates a direct link between local economic growth and local financial capacity, providing councils and combined authorities with a much stronger platform to invest in the infrastructure and services businesses need. The challenge now will be ensuring all parts of the Midlands are positioned to take full advantage of those opportunities.
The increase in the small business rates relief threshold for hospitality businesses will be welcomed by many independent operators who continue to face significant cost pressures. Hospitality businesses play a critical role in creating vibrant town and city centres. Supporting their viability is not just good for business; it’s important for place-making, visitor economy growth and community confidence.
The Leicestershire issue
Today’s Budget strengthens the case for devolution in Leicester, Leicestershire and Rutland. As Government gives more powers, funding and financial freedoms to devolved areas, it becomes increasingly important that our city and county secure a settlement that allows us to compete on equal terms with other major regional economies.
Developments in development
Today’s announcements represent a clear message that Government sees housebuilding as a central driver of economic growth. The combination of long-term affordable housing funding, support for first-time buyers, planning and regulatory certainty, and measures to improve brownfield viability should be welcomed across the development sector.
One of the most important announcements may actually be the commitment not to introduce further changes to building regulations during this Parliament. Developers and investors have repeatedly called for greater certainty. Stability allows the industry to focus on delivery rather than continually adapting to changing regulatory requirements.
The additional £1.5 billion for affordable and social housing, taking the programme beyond £40 billion over the decade, demonstrates recognition that the housing challenge cannot be solved by the private sector alone. The delivery of genuinely affordable homes is essential both socially and economically.
