Prime Minister Andy Burnham has set out plans that will see mayors including Liverpool City Region Mayor Steve Rotheram receive a share of income tax and business rates generated locally, in what he says will be the largest package of financial powers ever offered to regional leaders.
Income tax share for mayors
Under the plans, mayors will be given far greater fiscal and planning powers. While some mayoral authorities have already piloted retaining a share of business rates, this would be the first time regional leaders are handed a share of income tax. The government says this means local communities will directly benefit when their economy grows.
Burnham's promise
Mr Burnham, born in Merseyside and former Mayor of Greater Manchester, said his landmark plan will launch the biggest transfer of power from Westminster in a generation, giving communities greater control over decisions shaping jobs, transport, housing and public services. The Prime Minister has made pushing power and resources out of Westminster a central mission, allowing mayors to invest in what matters most locally.
Prime Minister Andy Burnham said: "I said we'd take power out of Westminster and carry it into every postcode in the country. Today, we make good on that promise. Under our plans, more of the taxes raised in a community will stay in that community. Soon, every local leader will have the power and resources to improve public transport, build homes and create jobs. I know what it's like to be ignored by politicians in Westminster. I'm not going to make that same mistake now I'm PM. The whole of government will now pull together behind the people and places that desperately need our support. This is how we'll bring back hope and bring power home to you."
Details and implementation
From next spring, mayors will begin retaining a greater share of locally generated revenues, starting with business rates. Further details on income tax retention will be set out in a roadmap at the Budget and underpinned by the government's commitment to fiscal discipline. The government says over time local areas will move away from dependence on Whitehall grants towards funding that rewards local growth.
Reforms will be driven by a strengthened No10 North operation in Manchester, working with mayors and local leaders. The plans also give mayors more powers over transport, allowing local projects like trams and metros to be built faster by removing Whitehall barriers and speeding up approvals. The full plans will be published alongside the autumn Budget.
Steve Rotheram's response
Steve Rotheram, Mayor of the Liverpool City Region, said: "For decades, regions like ours have driven the country's success but too often haven't seen enough of the benefits of that success stay in the communities that helped create it. This announcement is an important step towards changing that. When our economy grows, more of the value created here should be reinvested here too. Giving mayors a direct stake in that success means we can back the projects that create more opportunities – building the public transport network, homes, skills, and infrastructure that help our economy grow even further.
"Here in the Liverpool City Region, we've shown what's possible when decisions are made closer to the people they affect – whether that's bringing buses back under public control, introducing simpler, contactless fares, building tens of thousands of new homes, or investing in the industries that will power our future. This gives us the chance to build on that progress and make every pound of growth work harder for the 1.6m people who call our area home. Devolution is about improving people's everyday lives. With the right powers and long-term funding, we can keep building on our ambition to make our area the best place in the country to grow up, grow a family, and grow a business."
