Andy Burnham to give regional mayors share of income tax

By Ray Dombrowski · Reporting from Youngstown ·

Andy Burnham’s latest announcement is packaged as a revolution—a “biggest transfer of power from Westminster in a generation,” according to The Guardian.

More of the Taxes Raised in a Community Will Stay There

Andy Burnham’s latest announcement is packaged as a revolution—a “biggest transfer of power from Westminster in a generation,” according to The Guardian. The pitch is simple: local mayors will get a share of income tax and business rates, allowing them to improve public transport, build homes, and create jobs. He promises that the money generated by a community will stay there, finally ending what he calls the "begging-bowl culture" (a phrase echoed by Angela Rayner in independent.co.uk).

The details are concrete: mayors will receive business rates starting in 2027 and income tax shares beginning in 2028. The plan is designed to replace central government grants with local revenue streams, making the region responsible for its own payroll maintenance. John Healey stated that this gives communities a direct benefit when their economy grows—a clean, if abstract, accounting principle.

But I’ve spent my life auditing promises against actual employment figures. My spreadsheet doesn't care about "hope" or "power." It cares about the headcount and whether those jobs are still there five years from now. The core mechanism here is a revenue transfer: central government money, previously earmarked for specific national functions, is being re-routed to local authorities in exchange for political allegiance and localized spending power.

This Is How We Start To Build New Hope And Advance the Working People

The comparison to Scottish devolution cannot be ignored. Both are negotiated transfers of legislative and revenue powers from a centralized authority to regional bodies demanding greater self-governance. In 1998, following years of political maneuvering and referendum votes, the Scotland Act established the Scottish Parliament by transferring specific powers and revenues. The mechanism is identical: central power ceded in exchange for local control over resources.

The difference between these two events is merely a matter of branding. One involves constitutional law; this one involves an autumn budget white paper. Both rely on the same principle—that giving local leaders access to tax revenue will, by magic, generate sustainable growth that keeps people employed and mortgages paid. The historical precedent confirms my suspicion: when Westminster hands out cash based on economic potential, it is not a declaration of freedom; it is merely the formalization of an old constitutional mechanism, repackaged for modern political consumption.

Local Leaders Will Have The Power And Resources To Improve Public Transport

The argument that this shift will solve decades of structural underinvestment rings hollow to anyone who knows how government money actually works. ca.news.yahoo.com noted the OECD ranking the UK low in local tax collection shares compared to countries like France or Japan. Burnham’s plan is a response to this, but it fails to address the fundamental problem: that national economic policy—trade agreements, energy prices, labor mobility—is set at the highest level.

The supposed benefit of localized revenue retention is always predicated on the assumption that local leaders are uniquely positioned to guide investment into payroll-sustaining sectors. But history shows they are merely custodians of a fraction of the total tax pie. The central government still controls the major levers: the macro economy, national infrastructure spending, and the overarching trade policy that dictates whether a factory stays open or moves across the border.

This is not devolution; it is decentralization of accounting risk. It allows Westminster to claim credit for empowering local leaders while simultaneously ensuring that the most critical revenue streams remain under central control. The money flows out slowly, piecemeal, and always with conditions attached.

Sources

  1. The Guardian: Burnham to free mayors from ‘Treasury death grip’ with new devolved powers
  2. globalbankingandfinance.com: UK PM to Give Mayors Share of Income Tax in Devolution Drive
  3. independent.co.uk: English mayors allowed to keep share of taxes collected in their area
  4. huffingtonpost.co.uk: Andy Burnham Gives Mayors A Share Of Income Tax - HuffPost UK