Burnham’s fiscal devolution must extend beyond England

English devolution has, for a generation, been a settlement built on a fundamental contradiction: local leaders given the responsibility to deliver, but not the revenues to do so.

Since the first combined authority was established in Greater Manchester 15 years ago, mayors have been handed responsibility for transport, skills, housing and public health – without the financial autonomy to discharge them properly.

This could be changing under new Prime Minister Andy Burnham, who is harnessing his nine-year experience as Greater Manchester Mayor to usher in what he has labelled the biggest transfer of power from Westminster to local areas in a generation.

Crucially, new funding mechanisms will follow, with English mayors receiving a share of income tax revenues for the first time and retaining a greater share of business rates revenues – though, as ever, the picture remains blurred.

Genuine shift in direction

The status quo has offered local decision-makers very limited freedom to use their own fundraising.

Even the single departmental-style funding settlements provided to Greater Manchester and the West Midlands as part of the 2023 trailblazer deals remain reliant on central government grant funding and subject to spending controls, although they consolidate multiple funding streams into a more flexible pot.

However, the most progressive aspect of those deals was extending existing 100% business rates retention pilots for ten years, giving constituent authorities a meaningful stake in future business expansion.

Giving mayors a greater share of business rates revenues from spring 2027 brings a huge opportunity to incentivise mayoral strategic authorities – a statutory category that includes mayoral combined and combined county authorities – to invest in local economic growth, increasing revenue streams that can be recycled back into their communities.

This complements the proposed overnight visitor levy, which mayors will be able to introduce once the relevant legislation is enacted. Manchester raised about £2.8m in the first year of its existing accommodation business improvement district model, while Liverpool’s £2-per-room charge, introduced in June 2025, was forecast to raise £9.2m over two years.

Legal and constitutional picture

The English Devolution and Community Empowerment Act, which received Royal Assent in April under Sir Keir Starmer's premiership, created the statutory framework for strategic authorities and expanded powers in areas including planning, housing, roads and adult skills.

However, the new rail arrangements are principally being taken forward through the Railways Bill, broader bus-franchising powers came through the Bus Services Act 2025, and control over major transport approvals and 16–19 funding forms part of the more recent package.