What does the 2024 Budget mean for the Midlands?

Chancellor Rachel Reeves has announced the government’s latest Autumn Budget, unveiling a set of funding promises for the East and West Midlands aimed at spurring growth.

The budget promises to avoid any increases to National Insurance for employees, Income Tax, or VAT, meaning workers across the Midlands won’t see more tax coming out of their pay.

East Midlands

In the East Midlands, transport investment is a key priority, with £1.3 billion directed towards improving infrastructure in city regions across England for 2025/26.

The East Midlands Combined County Authority (EMCCA) will benefit from the City Region Sustainable Transport Settlements funding, a first for the region, which will help improve local public transport networks and road infrastructure.

For Newark, the Budget brings a focus on clean energy, with new funding committed to support hydrogen production projects. The investment is expected to unlock more than £400 million in private funding between 2024 and 2026 and create upwards of 700 jobs during both construction and operation.

These hydrogen production sites will join projects across the UK as it shifts towards cleaner energy sources and creating job opportunities.

Further incentives for business growth come from the newly approved Investment Zone in the East Midlands.

With flexible government funding and tax relief for new economic activities in the region’s designated tax sites, businesses will be able to start claiming relief from December, encouraging private sector investment and job creation across the EMCCA.

The government also confirmed ongoing support for the EMCCA’s Freeport initiative, aiming to attract even more private investment and bolster the local economy.

Households in the East Midlands facing financial strain will get a further boost, with £34.5 million added through the Household Support Fund extension, providing help with essentials such as food, energy, and water.

This six-month extension runs to March 2025, with further funding for the 2025/26 year to be announced by the Department for Work and Pensions (DWP) soon.

West Midlands

The West Midlands is set to benefit from a range of targeted investments aimed at enhancing transport, boosting innovation, and protecting local industry.

Starting in 2025/26, the West Midlands Combined Authority (WMCA) will receive a consolidated funding pot, intended to simplify access to funds for key regional projects.

Transport improvements will include £1.3 billion to upgrade city region infrastructure across the country, with the WMCA set to receive its share to support major projects such as the Wednesbury to Brierley Hill metro extension.

This funding represents a £200 million increase nationwide from the previous year, aimed at driving growth and connectivity in urban areas.

Local bus services are set for an overhaul, with £640 million pledged for the Bus Service Improvement Plans across England. These locally-led initiatives will support enhancements to routes, facilities, and accessibility for bus passengers across the Midlands.

The West Midlands also benefits from an extension of the Innovation Accelerator programme, designed to help turn the region into a world-class hub for research and development.

Originally launched as a pilot scheme, this programme brings together public and private sector funding to support cutting-edge innovation, attracting talent and investment from across the globe.

A newly implemented Carbon Border Adjustment Mechanism (CBAM) is expected to give additional support to cement, aluminium, and ceramics producers in the region.

The CBAM is designed to protect local industries from international competition with lower emissions standards, helping companies retain a competitive edge and maintain jobs in the West Midlands.

To help those struggling with rising living costs, the Household Support Fund extension will provide £49.5 million for the West Midlands until March 2025, with further support to be confirmed for 2025/26.

This funding will ensure low-income households get help with essentials like food and energy, providing some financial relief amid ongoing cost pressures.

Responding to the budget, Councillor John Cotton, Leader of Birmingham City Council, said: “The Labour government has inherited a £22 billion black hole and is taking the tough decisions needed to put the nation’s finances back in order, but after 14 years of neglect, I am pleased to see a 3.2% real-terms increase funding for local government.

"People across Birmingham will benefit from this budget, whether that’s thanks to an increase to the minimum and living wage, more funding for our schools, or through the new housing that we will deliver. Labour is delivering for our city and our country.”

Power to the Regions

In addition to these funding initiatives, the government is making plans to hand more control over local issues to the East and West Midlands. Local Growth Plans, developed in collaboration with mayors across the country, will guide investments and identify barriers to growth in each region, feeding into a refreshed national Industrial Strategy.

The upcoming English Devolution White Paper aims to transfer further decision-making powers from Westminster to local authorities, empowering regional leaders with tools for economic growth, housing, transport, and skills development.

According to the government, this Budget is the beginning of a long-term strategy to drive growth, support jobs, and build a stronger economy across the Midlands, putting more power and investment directly into the hands of local leaders and communities.

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