Andy Burnham to give regional mayors share of income tax
Constantvpn.com – Burnham held his first meeting at No 10 North in Manchester last week Prime Minister Andy Burnham will give all mayors of city regions in England a share of income tax revenue for the first time, as part of his drive to transfer power from Westminster to local leaders. Burnham will also allow mayors of English strategic authorities to keep some cash from business rates collected in their areas, and gain greater control over services such as housing, transport, skills. The government has not yet decided the exact portion of taxes mayors will get, with more details to be announced when Chancellor John Healey delivers his first budget in the autumn.
Opposition parties said the plans lacked detail and could lead to areas with weaker economies losing out on funding. But Burnham said the move would "make good" on his pledge to "bring power home" to "every postcode in the country". "Under our plans, more of the taxes raised in a community will stay in that community," the prime minister added.
Speaking to BBC Radio 4's Today programme, First Secretary of State Louise Haigh said areas would not need mayors to benefit from investment, because devolution powers would be held by new strategic authorities across England. She said: "We won't be imposing mayors to areas that don't want it but we will be creating strategic authorities in every area of England and they will be able to hold these powers and resources as well. "They don't need to have mayors in order to control them or in order to retain a share of their income tax and business rates." Strategic authorities bring together local councils to control regional issues such as transport and economic development, with decisions taken collectively by council leaders rather than a single elected mayor.
For example, the Lancashire strategic authority will take in Blackburn with Darwen Borough Council, Blackpool Council and Lancashire County Council, which form the Lancashire Combined County Authority area, despite the area not having a mayor. The power to raise and control tax revenues is highly centralised in the UK, making the country an outlier by international standards. The share of national taxes collected at a local level in the UK is 5.8%, the lowest in the G7, according to the OECD , external , a global policy forum.
That share is far below that of other countries with large economies such as France (20.4%), Japan (36%), and the US (45.7%). As it stands, mayors of strategic authorities in England receive most of their funding from central government grants. During his time as Greater Manchester mayor, Burnham pushed for greater control over tax revenue, rather than having to rely on government grants.
The UK government had already been exploring whether a share of revenue from national taxes could be distributed to metro mayors, before Burnham became prime minister earlier this month. But in a major speech on devolution in June, Burnham said he would "oversee the biggest rebalancing of power our country has ever seen" if he became prime minister. Burnham has put devolution at the heart of his plan for government, arguing that metro mayors are best placed to boost economic growth across the country.
Labour mayors, including Tracy Brabin – pictured here taking a selfie – have welcomed the devolution of tax revenues The prime minister says he wants local areas to move away from dependence on Whitehall grants, replacing grants with revenue from tax, arguing this will reward local economic growth. English metro mayors are expected to start retaining some revenue from business rates from April 2027, and receive a portion of income tax from April 2028. The rates of income tax – for example, the basic rate of 20% on income from £12,571 to £50,270 – will not change as a result of the reform.
Treasury sources say some metro mayors could end up with more money to spend if they grow their local economies and expand their tax bases, but officials are still figuring out how it will work in practice. One think tank, Re:State, has suggested , external the government should allocate mayors 2.5p in every pound raised by the 20p basic rate of income tax in their areas. Conservative shadow chancellor Sir Mel Stride said Andy Burnham's announcement was "very short on the detail" with "no new money being announced", which could mean areas with weaker local economies could end up losing out.
The Liberal Democrats warned the plans risked "creating a postcode lottery" that would leave millions of people living in rural areas "short-changed and underfunded". Reform UK home affairs spokesman Zia Yusuf said the prime minister should "fully devolve the power to stop the housing of illegal migrants in local communities by the Home Office". Conservative Tees Valley Mayor Lord Houchen has branded the plans a 'tax grab' Ministers will be expected to justify why powers should remain in Whitehall rather than being devolved, under a "local first" principle being developed by No 10 North in Manchester, with full details set to be published in a policy paper on the same date as the autumn budget.
The government is also working out the details of an equalisation system to ensure areas where less tax is collected continue to receive financial support. The reforms come after a policy blitz during Burnham's first two weeks in Downing Street, with announcements on the cost of living followed by a speech on his plan to overhaul social care. The reaction to the plans has been mixed among metro mayors from different parties, with the Labour mayor of West Yorkshire, Tracy Brabin, saying that giving regions like hers a proportion of income tax means "people will be able to see and feel the real benefit of their hard work and where that money is going".
However, Lord Ben Houchen, the Conservative mayor for Tees Valley, said he would prefer the government to cut taxes and claimed if he was handed a slice of local income tax, he would "create a new rebate scheme to put money back into people's pockets". Haigh poured cold water on this idea, arguing the aim was to reinvest money to improve services. "We've seen what the mayors have said about rebates," she said.
"There's not a system that would currently allow that. They certainly wouldn't be able to set tax rates locally or regionally." Lord Houchen hit back in a post on X, saying: "So devolution means getting people's taxes to spend but not being allowed to give it back to them. "Last time I spoke to the PM, devolution was about Whitehall not dictating what areas can or can't do.
"Doesn't sound much like devolution to me. Just an excuse for a tax grab." Do you have any views, comments or questions about this story? New 'No 10 North' plan will rebalance power in Britain, Burnham promises Will Andy Burnham's devolution plan raise economic growth?
Where will Andy Burnham take Wales and Welsh devolution?
Related Reading
Frequently Asked Questions
What is Andy Burnham to give regional mayors?
Andy Burnham to give regional mayors is the main topic of this guide. The article explains the context, practical details, and next steps readers should understand.
Why does Andy Burnham to give regional mayors matter?
Andy Burnham to give regional mayors matters because readers are looking for a useful answer, not just a short summary. Good content should match search intent and help them decide what to do next.
