Prime Minister Andy Burnham is set to grant regional mayors a portion of income tax revenues in a bid to strengthen local economies, marking a significant step in his devolution agenda. The plan, expected to be unveiled next week, will give mayors in areas including the West Midlands new spending powers to accelerate investment and infrastructure projects.
New fiscal powers without tax-raising authority
According to The Times, the new Prime Minister will not grant mayors the ability to set their own tax rates, but instead provide them with a direct share of income tax collected in their regions. This mechanism is designed to boost local control over funding without creating additional tax burdens for residents.
A government source stated: “For too long, governments have acted as if the answer to every problem sits somewhere in a Whitehall filing cabinet. Power should sit as close as possible to the people it affects, because the people best placed to solve a problem are usually the people living with it every single day.”
Burnham’s rapid devolution push
Since taking office, Burnham has moved quickly to decentralize power, notably by opening “No. 10 North” in Manchester. In his first address as Prime Minister outside 10 Downing Street, he reflected on what he described as wrong turns in the 1980s: “Political power was centralised, economic power privatised, large parts of the country deindustrialised, and they still haven't recovered.”
He added: “That's why we will change politics, to make it more collaborative, more about problem-solving than point scoring. And we will take power out of here and carry it into every postcode in the land so that they can do more.”
Local government empowerment
At the inauguration of No. 10 North, Burnham emphasized the importance of putting power in every postcode. “It's felt a little at times that local government's been a bit forgotten and places aren't able to do what they want to do,” he said. “Imagine if we were all working together as one team, pulling the same way and making the change happen for people and places.”
The Prime Minister framed the initiative as a way to rebalance the country: “Isn't it better that we have a North Pole that balances the South Pole of our country, where power will always be concentrated, but at least it creates that sense of a more balanced country.”
Implementation and regional impact
The new spending powers are expected to allow mayors to directly fund local priorities such as transport, housing, and skills training, reducing reliance on Whitehall approval. While the exact percentage of income tax to be devolved has not been disclosed, the move is seen as a major milestone in English devolution, building on earlier metro mayor models.
For the West Midlands, which has the country’s second-largest combined authority after Greater Manchester, the change could unlock significant resources. Mayor Richard Parker has previously called for greater fiscal autonomy to tackle regional inequalities.
Burnham concluded at the No. 10 North event: “Through this place, power is going to flow, energy is going to flow, new ideas are going to come through, the region's going to play back their ambitions here and the team is then going to say, right, we're behind you, we're going to make things work. That is a different way of running Britain.”
