North West Leaders Applaud £270m Devolution Funding for Manchester and Liverpool
Chancellor of the Exchequer Rachel Reeves has unveiled ambitious plans for increased financial devolution to cities and regions, with North West leaders enthusiastically welcoming the announcement. The Chancellor confirmed a total of £1.7 billion in investment for the North, including £175 million for Greater Manchester and up to £95 million for the Liverpool City Region.
Roadmap for Fiscal Devolution
During the annual Mais Lecture at Bayes Business School in London, Chancellor Reeves outlined a "road map for future fiscal devolution" to be published at the autumn budget. This initiative aims to grant regional mayors control over a share of national taxes, such as income tax, to invest directly in their local areas.
The Chancellor emphasized that this move would not increase the overall tax burden but would instead redistribute existing tax revenues from central government control to regional leaders. She described it as a "genuine break" with past practices and a "generational opportunity for Britain’s regions to make their own future."
Reeves criticized previous governments for merely paying "lip service to regional potential," stating, "In an unbalanced Britain, we all lose out." She highlighted the underperformance of major UK cities outside London compared to their European counterparts, such as Stuttgart, Turin, and Lyon.
Regional Leaders Respond
Liverpool City Region Metro Mayor Steve Rotheram expressed strong support for the plan, noting that for too long, young people in the North have felt compelled to leave home to find opportunities. "Where you grow up shouldn’t determine how far you can go in life," he said. Rotheram pointed to the region's growing life sciences sector and university research as evidence of local potential, with more graduates choosing to stay and build careers locally.
Andy Burnham, Mayor of Greater Manchester, welcomed the Chancellor's backing, describing the North as the UK's biggest growth opportunity. "We have a plan to re-industrialise the birthplace of the Industrial Revolution and now have the necessary investment to deliver it," Burnham stated. He highlighted Greater Manchester's new Good Growth Fund, which aims to lift all people and places through innovative economic models.
Expert Analysis and Support
Jessica Bowles, Vice Chair of the Northern Powerhouse Partnership, called the move toward giving Mayoral Combined Authorities a share of national taxes a "huge step." She emphasized that strengthening accountability while granting more power to mayors is the right direction for devolution, moving away from a competitive funding system to one where regions can grow their own economies.
Henri Murison, Chief Executive of the Northern Powerhouse Partnership, noted that the Chancellor's plans will drive economic growth not only in cities but also in surrounding towns. "Towns are more successful when their nearest large city is doing well," he explained, citing examples like Manchester's positive impact on Cheshire and Stockport.
Andrew Carter, chief executive of Centre for Cities, found the commitment to help UK cities overtake G7 peers on productivity "very encouraging." He identified key issues such as small city centres, low public transport connectivity, and investment bottlenecks, suggesting that fiscal devolution and expanded city centres are crucial for long-term planning and growth.
Future Implications
The devolution roadmap is expected to initially target areas with the greatest capacity to deliver reforms and benefit from them. This approach aims to close the productivity gap between UK cities and their European counterparts, fostering regional innovation and job creation.
With this funding and increased autonomy, leaders in Manchester and Liverpool are poised to implement projects that deliver good homes, jobs, and improved transport, ultimately creating more opportunities for residents to thrive within their communities.
