Burnham's Devolution Plan Frees Mayors from Treasury Grip 2026

The UK government's new devolution plan, led by Andy Burnham, aims to free regional mayors from the "death grip of the Treasury" by granting them borrowing powers and a share of local income tax. This historic shift in power from Whitehall to local leaders is set to transform how regions fund infrastructure and public services.

What Does the Devolution Plan Include?

Under the proposals, England's directly elected mayors will retain a portion of income tax generated in their areas starting in 2028, alongside business rates from April 2027. These funds will replace existing central grants, giving mayors long-term financial certainty and the ability to borrow for major projects like transport, housing, and job creation.

Andy Burnham, the Mayor of Greater Manchester, described the plan as "the biggest transfer of power from Westminster in a generation." He emphasized that more taxes raised in a community will stay in that community, enabling local leaders to address regional priorities without seeking approval from London.

Key Benefits for Local Leaders

The new "local first" principle requires ministers to justify why powers should remain in Whitehall, reversing the default assumption. This shift could lead to mayors overseeing schools, GPs, and childcare through health and education commissioners, similar to police and crime commissioners.

• Financial autonomy: Mayors can invest in long-term projects without Treasury interference.
• Accountability: Local leaders answer directly to their communities, not central bureaucrats.
• Economic growth: Retained taxes incentivize local job creation and business development.
• Reduced bureaucracy: A smaller, more strategic civil service as decisions move out of London.

Comparison: Old vs. New Funding Model

Impact on Public Services and Infrastructure

Mayors will gain control over technical education for teenagers, with potential future oversight of schools and healthcare. This could lead to more tailored services that meet regional needs, improving outcomes for residents. The plan also aims to reduce the size of the civil service from 520,000 to a more strategic workforce, with one in five officials currently based in London.

Challenges and Considerations

While the devolution is widely welcomed, critics note that replacing grants with local taxes does not increase overall funding. However, supporters argue that the flexibility and certainty outweigh the lack of new money. Oliver Coppard, Labour mayor of South Yorkshire, called it "transformational" for breaking the cycle of dependency on central handouts.

What This Means for the Future

The devolution plan represents a significant step toward rebalancing the UK economy, empowering regions to drive their own growth. As Burnham stated, "Every local leader will have the power and resources to improve public transport, build homes, and create jobs." This could reshape the relationship between Westminster and local communities for decades to come.

Key Takeaways

• Mayors will keep a share of income tax and business rates from 2028 and 2027 respectively.
• New borrowing powers enable investment in large-scale infrastructure projects.
• The "local first" principle shifts the burden of proof to Whitehall.
• Potential expansion into education and health oversight for mayors.
• Civil service will become smaller and more strategic as powers devolve.

FAQ