What does the Autumn Budget mean for neighbourhoods?

Roshni Mistry, Local Trust’s senior policy and parliamentary officer, looks at how the Labour government’s fiscal plans will affect neighbourhoods, and where they can go further to support the country’s most deprived areas.

Last month, the new chancellor Rachel Reeves presented Labour’s first Autumn Budget, after “a decade of low growth”. The government had the difficult task of repairing the public finances while raising much-needed funds for public services and large infrastructure projects.

By reforming fiscal rules, introducing new taxes, and borrowing to invest, the chancellor made her mark and set herself apart from her predecessors. But what did the budget mean for the country’s most deprived neighbourhoods?

Neighbourhood policing

“The [Home Office] settlement will increase the core government grant for police forces … putting the government on track to deliver the manifesto pledge to boost visible neighbourhood policing with 13,000 more neighbourhood officers and Police Community Support Officers.”

This is the first time in years that a budget has mentioned neighbourhood policing. It is a welcome step towards community-level prevention, as outlined in Local Trust’s paper Tackling crime in every neighbourhood. Historically, local action has been overlooked as a factor in preventing crime, despite being a proven way for communities to reduce crime rates in their area.

While a move towards neighbourhood policing is welcome, the government can now go further by giving communities a formal role in producing long-term crime prevention plans, alongside a dedicated budget for prevention at a neighbourhood level.

By bringing residents into the process, policymakers can mobilise local expertise, knowledge, and networks – a crucial step to make sure prevention efforts are tailored to the local community, rather than a ‘one size fits all’ approach.

Neighbourhood healthcare

“In the spring, we will publish a 10-year plan for the NHS to deliver a shift from hospital to community, from analogue to digital and from sickness to prevention.”

This was a crucial budget for local health. The policy direction is clear: “the government wants to see more care delivered through Neighbourhood Health Services.” We have to wait for the details until next year, but this marks the beginning of a shift in the healthcare system “from hospitals to communities”, moving services closer to where people live.

…if the government is to address the root causes of poor health, it must rebuild the community capacity that allows citizens to live healthy lives.”

As we argue in our paper Towards a neighbourhood health service and our joint report with the NHS Confederation – if the government is to address the root causes of poor health, it must rebuild the community capacity that allows citizens to live healthy lives.

This starts in the most deprived neighbourhoods, where poor health is disproportionately concentrated. Addressing health inequality would significantly reduce demand on public services, counter unemployment and increase local prosperity. We would like to see all Integrated Care Systems (ICSs) adopt neighbourhood working to ensure that decisions and services genuinely reflect both local needs and community assets.

Devolution of power

“The government is working closely with local leaders on the upcoming English Devolution White Paper. This will … deepen the powers of existing mayors and their combined authorities, ensuring they have the tools needed to boost economic growth.”

The English Devolution Bill has the potential to shift power from Westminster to local communities, giving residents the chance to transform their neighbourhoods and high streets. Again, this is a step in the right direction, suggesting councils will have greater flexibility to respond to local needs.

But to make a lasting change, the government must be bolder. The bill should be used to hold regional, mayoral and combined authorities in England accountable for regeneration in their regions, with a targeted focus on doubly disadvantaged neighbourhoods.

As our research with the Centre for Progressive Policy shows, past regeneration efforts have been too broad – investment tends to reach big cities and towns but hasn’t trickled down to the most deprived neighbourhoods. Future deals should be conditional on devolution reaching these ‘hardest to reach’ spots.

UK Shared Prosperity Fund (UKSPF)

“The UK Shared Prosperity Fund will continue at a reduced level for a further year with £900million of funding; this transitional arrangement will provide as much stability as possible in advance of wider local growth funding reforms.”

The UKSPF could provide a huge amount of investment for local regeneration, with a dedicated funding strand for ‘communities and place’. With the right targeting, this money could be used to strengthen the social fabric and resilience of the most deprived pockets of the UK.

Originally due to expire in March 2025, the scheme has now been extended for another year, with £900 million for local authorities “in advance of wider funding reforms” expected by 2026.

While this stop-gap funding is welcome, the chancellor has the opportunity to make long-term reforms more effective still. Future pots of money for regeneration should hand investment decisions directly to communities, rather than relying on competitive bidding processes – which tend to benefit areas with existing organising capacity.

Funding should also be guaranteed over a longer timeframe, ideally a 10 to 15-year period, to enable the kind of lasting transformation the government says it wants to achieve.

A shift to long-term thinking

This budget was the first big test for the new chancellor. It contains many policies designed to improve the most disadvantaged neighbourhoods – the extension of the UKSPF, confirmed funding for core MHCLG projects, keeping the Long-Term Plan for Towns, and reforms to the local growth funding landscape (with the promise of more to come). This marks a break from the past; not only do these policies reflect a shift toward long-term thinking, they also have the potential for a fundamental transfer of power if the government gets the English Devolution Bill right.

All this matters. For the last decade, community spaces, pubs, and libraries have been shuttered up. Local networks and social connectedness have eroded. Civic infrastructure – physical and social – is essential for the wellbeing of people and the local economy. This is particularly true for neighbourhoods facing a double disadvantage – those with the highest levels of deprivation and the weakest social infrastructure.

The government clearly recognises the need to turn the tide in these neighbourhoods. With this budget, the chancellor has taken the first steps. But now comes the hard part: lasting change.

Discover Local Trust’s series of papers exploring how learning from the Big Local programme can inform the delivery of the new Labour government’s five missions, and where these could have the greatest impact – at the neighbourhood level.