Andy Burnham to Give Regional Mayors New Powers Over Income Tax Revenue
Ninoda.com – Andy Burnham to give regional mayors a direct stake in income tax collection represents one of the most significant devolution reforms in recent British political history. The Prime Minister has announced that metro mayors across England will receive their first-ever share of income tax revenue, marking a fundamental shift in how city regions are financed. This comprehensive initiative aims to decentralise financial authority from Westminster and empower local leaders to make independent decisions about their communities’ economic futures.
Expanding Local Financial Autonomy
Beyond the income tax allocation, Andy Burnham to give regional authorities additional powers over business rates retention within their jurisdictions. The proposed reforms grant mayors overseeing English strategic metropolitan areas the ability to keep a portion of business rates generated locally. These expanded financial controls complement enhanced oversight responsibilities for transport networks, housing development, and skills training programmes. Chancellor John Healey will present detailed figures when delivering his first budget later this autumn, providing clarity on exact distribution percentages.
Global Perspective on Tax Devolution
The United Kingdom stands as an exception among developed nations concerning tax centralisation patterns. OECD statistics reveal that merely 5.8% of national taxes are collected at local level—a proportion representing the lowest figure among G7 economies. This contrasts dramatically with international counterparts: the United States collects 45.7% locally, Japan achieves 36%, and France reaches 20.4%. Andy Burnham to give regional mayors greater financial independence aligns with global best practices in local governance. Having previously served as Greater Manchester mayor, Burnham has consistently championed reduced dependence on central government grants.
Implementation Timeline and Mechanics
Metro mayors throughout England will begin retaining business rates revenue from April 2027, with the income tax component following in April 2028. The strategic objective involves progressively replacing conventional grant funding with these newly devolved tax sources. Crucially, existing income tax rates will remain unchanged by the restructuring. The basic rate continues at 20% for earnings falling between £12,571 and £50,270 annually. Andy Burnham to give regional leaders this financial autonomy represents a long-term commitment to local empowerment.
Political Responses and Considerations
Treasury officials suggest that mayors benefiting from economic growth within their regions could ultimately secure increased spending capacity. While the income tax allocation will vary geographically, implementation details remain under refinement. Think tank Re:State has proposed that mayors receive 2.5p for every pound generated through the 20% basic income tax rate within their boundaries. Conservative shadow chancellor Sir Mel Stride expressed scepticism regarding the announcement’s substance:
Unless Burnham is going to launch another tax raid elsewhere, borrow even more, or make cuts to central government grant, there is no new money being announced here.
Stride further cautioned that regions with less robust local economies might experience reduced funding—potentially contradicting the prime minister’s stated intentions.
Broader Devolution Agenda
Reform UK’s home affairs spokesperson Zia Yusuf urged Andy Burnham to give regional authorities additional powers concerning migrant accommodation:
Andy Burnham says he wants to devolve power and actually listen to local people. If he was listening, he would know that they do not want unvetted illegal migrants dumped in their areas.
Labour mayors, including Tracy Brabin, have publicly endorsed the tax revenue devolution. The government is simultaneously developing an equalisation mechanism designed to provide continued financial assistance to areas collecting lower tax revenues. Under a proposed “local first” framework, ministers will need to demonstrate justification for retaining any powers within Whitehall rather than transferring them locally. Policy documentation outlining comprehensive details is being prepared by No 10 North in Manchester and will be published shortly.
