Andy Burnham's Devolution Plan: Unbundling England's Centralised 2026

Andy Burnham's critique of England's centralised state highlights how the past 40 years of economic policy have left regions without the power to recover from deindustrialisation. His radical plan to unbundle English government is a welcome step toward a more balanced economy. This article explores the three pillars of his devolution programme and what they mean for regions like Yorkshire and the Midlands.

The Problem: England's Over-Centralisation

England is among the rich world's most centralised countries, as Andy Burnham points out. Only post-communist Europe deindustrialised as rapidly as Yorkshire and the Midlands did in the 1980s. Centralisation did not close every factory or pit, but it left regions without the powers, finance, or institutions to cushion the shock or build a resilient replacement economy.

This lack of regional autonomy has led to persistent disparities in wealth, investment, and public services. The result is a 'left behind' feeling that fuels political discontent and economic stagnation.

Burnham's Three-Pillar Devolution Plan

Andy Burnham's plan to unbundle English government has three facets. The first is a detailed cabinet paper released on Friday, which is a blueprint for a decentralised state organised around mayors as key regional economic actors. It also proposes pan-regional agencies for transport, energy, and investment that cross mayoral boundaries.

The second pillar, confirmed by No 10, allows mayors to keep income-tax and business-rate revenues, with the forthcoming budget deciding on how much. The third pillar, modelled on Germany's Basic Law, would require English regions to pursue equivalent living conditions nationwide.

How Tax Retention Would Work

Under the new system, a mayoral authority would receive a share of tax revenues and benefit when its economy grows. However, the national government would continue redistributing resources so that poorer places can provide comparable services and have meaningful investment capacity. Without this equalisation measure, disparities would widen.

For example, a thinktank calculated that if mayors received 2.5% of the 20p basic rate of income tax, London would get £2.3bn in 2026-27, while Hull and East Yorkshire would get only £135m. This shows the need for redistribution.

Comparison: Current System vs. Proposed Devolution

Key Takeaways from Burnham's Plan

• Mayors become central to regional economic development.
• Tax retention incentives growth, but redistribution is essential.
• Pan-regional agencies can handle cross-boundary issues like transport and energy.
• Germany's Basic Law model ensures equivalent living conditions.
• Regions without mayors can opt in or choose weaker powers.

Potential Challenges and Reactions

While the plan is radical and welcome, it faces challenges. Ben Houchen, the Tory mayor of Tees Valley, has raised concerns about the details. Some argue that without robust equalisation, richer regions will benefit more, widening the north-south divide.

However, Burnham's proposal includes a duty to pursue equivalent living conditions, which could mitigate this risk. The success will depend on how the budget and spending review implement the tax retention and redistribution mechanisms.

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