Prime Minister Andy Burnham is preparing to hand mayors a share of income tax revenue, significantly boosting spending powers for Sir Sadiq Khan and other regional leaders. The extra cash is intended to fund local infrastructure, investment, job creation and growth projects.
Devolution plans expected next week
Extensive devolution plans, expected to be unveiled next week, will outline greater freedoms for England's 14 regional and metro mayors, according to the Sunday Times. Local leaders will receive a share of income tax revenue but are not expected to gain new tax-raising powers.
Traditionally, the Treasury has controlled local funding distribution from Westminster. Regional leaders have blamed this model for failing to direct money to where it is most needed.
Government source comments
A government source told the Times: "For too long, governments have acted as if the answer to every problem sits somewhere in a Whitehall filing cabinet. Power should sit as close as possible to the people it affects, because the people best placed to solve a problem are usually the people living with it every single day."
Details remain unclear, including whether equalisation measures will be in place to protect poorer regions outside the capital from being disadvantaged by the policy.
Khan's response
Mr Burnham, the former mayor of Manchester, has faced accusations of being "anti-London" and diverting money away from the capital. However, Sir Sadiq Khan said this week: "I think [Mr Burnham] is having really good first few days." He added: "And I'm hoping over the course of the next few days and weeks, you'll see more policies from Andy showing he understands the challenges individuals, families and businesses face, and respond to that accordingly."
Cost concerns
The devolution changes are expected to be led by No 10 North in Manchester, launched this week alongside cost-of-living spending plans. The Resolution Foundation estimates the pledges will cost over £2 billion in 2029/30. Conservative Party chairman Kevin Hollinrake said: "Where's the money coming from, Andy? We're all dying to know. It is all well and good for the Prime Minister to promise to fix the issues facing our country, but how is he going to pay for them?"
