Andy Burnham Devolution Plan: Income Tax Powers for Mayors

Prime Minister Andy Burnham has unveiled a devolution plan that would, for the first time, give all mayors of city regions in England a share of income tax revenue. The move is part of his broader drive to transfer power from Westminster to local leaders, a promise he has long championed. Under the plan, English strategic authorities would also be allowed to keep some of the business rates collected in their areas and gain greater control over services such as housing, transport, and skills.

The announcement, made on 30 July 2026, marks a significant shift in how regional governance could operate in England. But the exact portion of taxes mayors will receive has not yet been decided. More details are expected when Chancellor John Healey delivers his first budget in the autumn. This uncertainty has already drawn criticism from opposition parties, who argue the plans lack detail and could disadvantage areas with weaker economies.

Andy Burnham Devolution Plan: Key Details

At its core, the plan is about fiscal devolution. For the first time, mayors of city regions would have a direct stake in the income tax generated by their communities. Burnham said the move would "make good" on his pledge to "bring power home" to "every postcode in the country." He added: "Under our plans, more of the taxes raised in a community will stay in that community."

Beyond income tax, the plan allows strategic authorities to retain a portion of business rates collected locally. This is intended to give regions a stronger incentive to support local businesses and economic growth. The authorities would also gain more control over key public services, including housing, transport, and skills training—areas where local leaders have long argued they can make better decisions than Westminster.

The structure of these strategic authorities is notable. They bring together local councils to manage regional issues collectively, with decisions taken by council leaders rather than a single elected mayor. This model is designed to ensure that areas without a mayor can still benefit from devolved powers.

How it could reshape regional governance

If implemented as described, this plan would represent a fundamental change in the relationship between central and local government in England. For decades, power has been concentrated in Whitehall, with local authorities often reliant on central funding and approval for major decisions. By giving mayors a share of income tax, the government is effectively creating a new layer of fiscal accountability.

First Secretary of State Louise Haigh told BBC Radio 4's Today programme that areas without mayors would also benefit from investment. She explained that devolution powers would be held by new strategic authorities across England, ensuring broader coverage than previous devolution deals. This is a key point: the plan is not just about the big city regions like Greater Manchester or the West Midlands, but about creating a framework that can be applied nationwide.

The timing is also significant. Burnham, who previously served as Mayor of Greater Manchester, has long been an advocate for devolution. His experience in that role likely informs his approach. The plan builds on existing devolution agreements, but the income tax element is a new frontier. If successful, it could set a precedent for other regions to follow.

Criticism and concerns

Not everyone is convinced. Labour backbencher Perran Moon, the MP for Camborne and Redruth in Cornwall, called the plans "discriminatory" and warned they could create a "two-tier system." His concern is that areas like Cornwall, which would never have a mayor or become a combined authority, risk missing out on devolved powers that other regions would enjoy. This is a legitimate worry: the plan's design may inadvertently favor areas with existing mayoral structures.

Opposition parties have also voiced concerns about the lack of detail. Without knowing the exact percentage of income tax that mayors will receive, it is difficult to assess the true impact. There are fears that areas with weaker economies could lose out on funding if the tax share is based on local revenue generation. A region with lower incomes would naturally raise less tax, potentially widening existing inequalities.

The government has not yet responded to these criticisms in detail, but the autumn budget will be a crucial moment. Chancellor John Healey will need to provide clarity on the tax share and address concerns about fairness. The devolution plan is ambitious, but its success will depend on the details.

What this means for the future

This plan has the potential to be a landmark in UK governance. By giving mayors a direct financial stake in their communities, it could encourage more local innovation and accountability. It also aligns with broader trends in public administration, where there is growing recognition that local leaders are often better placed to understand local needs.

However, the plan is not without risks. The two-tier system concern raised by Perran Moon is real, and the government will need to ensure that all regions, not just those with mayors, benefit from devolution. The autumn budget will be a key test of whether the government can deliver on its promises.

For those interested in how this plays out, the Manchester Mayor Election 2026 results and analysis offer a useful backdrop, as Burnham's own political journey has been closely tied to the city's devolution story. Similarly, the broader debate about regional funding and infrastructure, as seen in the Suffolk fires and Sizewell response, highlights the kind of local challenges that devolved powers could address.

The devolution plan is a bold step, but the real test will be in its implementation. As the details emerge, the focus will be on whether it delivers genuine benefits for all regions or simply creates new divisions. For now, the promise of "bringing power home" remains just that—a promise. The autumn budget will show whether it can be kept.