On 28th October, the Chancellor delivered the 2026 Autumn Budget, setting out the Government's latest tax and spending plans. There were no increases to the headline rates of Income Tax, National Insurance or VAT. Instead, the focus was on cost-of-living support, more power for mayors, and a funded Defence Investment Plan. This Budget shapes where public money flows, who makes spending decisions, and which services are delivered.
The Big Picture
The OBR forecasts growth of 1.2% in 2026, slowing to 1.0% in 2027, alongside a fall in borrowing to 1.8% of GDP by 2030-31. While the Budget places emphasis on fiscal discipline and cost-of-living, much of the detail at departmental level will follow at the 2027 Spending Review. That makes this Budget more about overall direction than final numbers.
Following the Money to the Regions
Devolution was one of the most anticipated parts of this Budget. Mayors will now receive a share of Income Tax and Business Rates revenue, while local authorities will keep more of the Business Rates income they collect. The Budget also sets up ‘Good Growth Funds’ for mayors and local leaders across England, and a new borrowing facility for Mayoral Strategic Authorities from 2028-29.
These new policies build on a shift we have been tracking for some time: more spending power at regional level, with more decisions made and delivered locally.
Greater financial responsibility also increases the importance of local delivery capability. Combined and strategic authorities will need business cases that stand up to scrutiny, commercial arrangements that demonstrate Value for Money, and the capability to take programmes from investment decision through to delivery.
Buying Better
The Budget commits to using strategic public procurement to back British firms and build a skilled domestic workforce. Beyond that, procurement got little airtime. The bigger signal is the 20% cut to departmental administration budgets, which means contracting authorities will be asked to deliver more with fewer people.
These measures sit within a wider shift in public procurement towards transparency, supplier access, and demonstrable public value. For contracting authorities, the practical implication will be how those objectives are reflected in procurement pipelines, market engagement, evaluation, and contract management, rather than simply in procurement policy itself.
Infrastructure
Although capital investment is £120bn higher over this Parliament than previously planned, public sector net investment still falls from 2.9% of GDP in 2026-27 to 2.3% by 2031-32. The National Wealth Fund will receive additional funding, and the British Business Bank will put up to £5bn into defence and dual-use sectors over the next four years. Housing will also receive £1.5bn to support the delivery of around 10,000 homes, on top of a Social and Affordable Homes Programme worth more than £40bn over ten years.
The scale of investment is only one part of the infrastructure picture. Turning investment into functioning assets depends on projects progressing with strong commercial and programme capability.
Scaling Defence Capability
The Government has restated its NATO commitment to spend 3.5% of GDP on defence by 2035, with a 3% target in 2030, however the path to achieving these targets will not be set out until next year’s Spending Review. The Budget fully funds the £15bn Defence Investment Plan from 2026-27 to 2029-30. £10.3bn comes from reprioritisation. The remaining £4.7bn is made up of £3bn from a 1% cut to departmental capital budgets and £1.7bn from the Treasury reserve. In practice, other departments are helping to pay for defence.
As defence budgets rise, scrutiny of spending will rise with them. The new Innovative Defence Financing Taskforce demonstrates a push to bring private capital into the supply chain. That makes Value for Money and supply chain resilience central to turning increased spending into capability.
From Funding to Delivery
Across the Budget, a common theme is the challenge of turning funding and policy priorities into measurable outcomes.
Against a backdrop of slow growth, high debt, and tighter budgets, how public money is deployed matters as much as the amounts allocated. This Budget will be judged on delivery, not announcements.
Deecon’s Public Sector team helps turn public sector ambition into results: supporting robust business cases, stronger commercial and procurement strategies, independent assurance, and complex programmes that stay credible, deliverable and focused on outcomes.
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Written by Connor Ovenstone
Edited by Kate Randall