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In a significant shift towards decentralisation, Andy Burnham, the mayor of Greater Manchester, is set to announce a groundbreaking devolution plan that promises to grant English regional mayors greater financial autonomy. Starting from 2028, mayors will be able to share in income tax receipts and gain the ability to borrow for substantial projects, reducing their dependency on central government funding. However, critics are wary that these changes may not benefit all regions equally, exacerbating existing disparities.
A New Financial Framework
Under the proposed scheme, which forms part of the government’s broader devolution agenda, regional mayors will no longer rely solely on central grants. Instead, they will retain portions of income tax and business rates, which could transform local finances. This shift is heralded as a pivotal moment in the governance of English regions, potentially empowering local leaders to invest in essential public services, including housing and transport.
Burnham’s announcement, expected at a community centre in the north of England, is being described as “the biggest transfer of power from Westminster in a generation.” The government has indicated that it will also develop specific proposals tailored for Scotland, Wales, and Northern Ireland, further illustrating the significance of this initiative.
Criticism and Concerns
Despite the potential benefits, the proposal has faced scrutiny, particularly from Conservative politicians. Shadow Chancellor Mel Stride expressed concerns that the new funding model might favour economically robust areas while neglecting regions with weaker economies. Stride stated, “If faster growing areas get more funding, it could mean those who lose out are precisely those areas which have seen weaker local economies over recent years.”
Local leaders have expressed optimism about the changes, viewing the reduction in reliance on central Treasury handouts as a game-changer. They argue that the current system often leads to an uneven distribution of resources, leaving many communities feeling disenfranchised and underfunded.
The Government’s Position
Louise Haigh, the newly appointed Chancellor of the Duchy of Lancaster, addressed concerns about the potential for the wealth gap to widen under the new system. Speaking on Times Radio, she acknowledged that areas like London, which already attract significant investment, would likely retain more funds. However, she insisted that a formula would be established to ensure fair distribution, stating, “You wouldn’t want to have it that places like London and Manchester were able to retain more while other areas that weren’t growing at the same rate were falling behind.”
Haigh also highlighted the importance of devolving additional powers to local authorities, enabling them to tailor their own strategies for regional growth. This includes control over 16-19 funding and employment support budgets, which could be crucial for fostering economic development outside London and the South East.
Looking Ahead
As the government prepares to release further details in a forthcoming white paper and budget, the anticipation surrounding Burnham’s announcement continues to grow. Both supporters and critics await clarity on how this ambitious devolution plan will be implemented and its potential implications for local economies across England.
Why it Matters
The outcome of Burnham’s devolution plan could fundamentally alter the landscape of local governance in England. By granting regional mayors greater financial independence, it offers a chance to address long-standing inequalities in funding and resources. However, without careful implementation and consideration of regional disparities, there is a risk that the initiative may deepen existing divides, leaving the most vulnerable areas even further behind. As the nation contemplates this shift in power dynamics, the stakes could not be higher for communities across the country.
