New mayors can fund housebuilding from £200m-per-year pot, but cash will be delayed alongside elections

“This is because devolution is strongest when it is built on strong foundations, therefore, moving forward, we will ensure strong unitary structures are in place before areas take on mayoral devolution,” he said.

The North West regions which had already postponed their first mayoral elections to 2027 will only receive half their funding next year and the full cash once they have had their mayoral contest.

The Ministry of Housing, Communities and Local Government (MHCLG) confirmed the cash can be spent on speeding up housebuilding schemes or bringing more social and affordable homes onto the market. It is not ringfenced, however, and can be spent flexibly on anything considered to boost an area’s economy to create “lasting jobs and opportunities”.

Mr Reed confirmed the funding will be split between capital and revenue, and will be additional to already-devolved funding streams from other departments, such as adult skills and transport.

The £200m per year will be divided between the areas based on their populations, he said.

Greater Essex and Hampshire and the Solent will get the lion’s share of the cash, receiving £41.5m and £44.6m, respectively.

Norfolk and Suffolk and Sussex and Brighton will get slightly smaller shares of £37.4m and £38m, while Cheshire and Warrington will be given £21.7m, and £11.11m per year will go to Cumbria.

All regions will receive at least £3m per year and a £1m payment in the coming months to help set up the mayoral authorities.

In a press release, MHCLG claimed delaying the elections “would ensure that new mayors come into office with effective and empowered local government already in place, helping them hit the ground running from day one”.

The Labour government’s move sparked a backlash among opposition parties in the House of Commons.

Speaking in parliament after raising an urgent question on the matter, David Simmons, Conservative MP for Ruislip, Northwood and Pinner, underlined that work had been done to prepare for the elections and said the ambiguity had “caused a huge amount of doubt, significant cost and logistical challenges at a local level”.

“This is a huge waste of public money for elections that we are all ready for,” he added.

Zöe Franklin, Liberal Democrat MP for Guildford, said she was “very concerned” about the investment funding plans. She asked why the cash was being delayed when local and upper-tier authorities had already agreed priorities and the money was needed.

Jim McMahon, Labour’s previous minister for local government, called his own party out. He told the chamber “we need to be better than this”, saying local leaders had put aside their differences and done “everything asked of them” to get a better settlement for their constituents.

He emphasised that work had been done to get ready for the elections and confirm funding, including parties selecting their candidates. This left only the legislation to be laid for polling day.

“The government have a moral and a legal obligation to honour their side of the bargain,” he said.

“Following a statutory process, all involved had a reasonable expectation that these elections would go ahead. The government know that trust is hard won, but easily squandered.”

In her response, Miatta Fahnbulleh, minister for devolution, faith and communities, insisted that the inaugural mayoral contests should be treated separately from local council elections due to take place as scheduled in May. 

“It is absolutely right that we take stock of where we are and the process that we are asking places to get through, to ensure that, at the end of this, we have strong unitary councils that are going through the process of reorganisation, strong strategic authorities, and then a mayor.”

On investment, she said: “We have committed to a third, but we will continue to work with areas to ensure that if they have viable investment propositions, the government are walking hand in hand and side by side with them to unlock that.”

Responding to Mr McMahon, she thanked him for the work he had done, but added: “It is absolutely right that we, as a new ministerial team coming in, look at the facts and at where we are, and that we make a judgement.”