Prime Minister Andy Burnham believes the whole of England can follow Manchester's example as he pushes forward with what he calls "the biggest redistribution of power this country has seen." The plan involves shifting power out of Whitehall and handing it to regional mayors, including what the Government terms "fiscal devolution"—allowing mayors to collect taxes.
This summer, more than 25 million Brits avoided planes and ferries and enjoyed a holiday in the UK instead. However, so-called staycations are set to become more expensive due to the proposed changes. Local Government Secretary Angela Rayner convened a meeting at Number 10 North, the Government's new office in Manchester, where she told mayors they would be allowed to impose a charge on holidaymakers in their regions.
Overnight Stay Levy and Local Income Tax Plans
The overnight stay levy could add 5% to hotel bills, and the travel industry is worried. Business leaders fear extra costs will put off both Brits and foreigners considering a holiday in the UK. However, this is just the start. Chancellor John Healey is to set out plans for mayors to impose a "local income tax" as part of his Budget statement on October 28. This may be matched by a cut in the national income tax currently paid, but so far that has not been guaranteed.
Mr Burnham believes he transformed Manchester during his nine years as Greater Manchester Mayor. His commitment to devolution "is backed by a decade of personal experience of turning around one of the UK's former industrial heartlands and turning it into the fastest growing city region in the country, bucking the low-growth trend," he said. He wants to spread the Manchester story nationwide, stating: "I want every single place across our regions and nations to be able to do the same, creating the conditions for good growth in every postcode."
Strategic Authorities Across England
Under Labour's plans, every part of England is due to get a "strategic" authority by 2028. These are regional councils, also known as combined authorities, which can cover a number of towns and cities. For example, the Greater Manchester authority, which Mr Burnham led in his mayor role, includes Wigan, Bury, Bolton and more, as well as Manchester. Existing strategic authorities, which also include the Liverpool City Region and West Midlands, have tended to serve urban areas, but similar bodies will now be created in every part of England, including the leafy shires.
Mr Burnham would like the new authorities to be led by directly-elected mayors, although in regions where that appears unpopular, the Government will consider other ideas such as a committee of local council leaders. To start with, strategic authorities will take control of training and drawing up industrial strategies. They will also have the power to build housing, and may be allowed to take over local transport services. In addition, mayors will sit on the Government's National Economic Council, which is set to take a bigger role in deciding economic policy. More details are expected when the Government publishes a White Paper, to be called Rewiring the State, alongside the Budget.
Concerns Over Costs and Leadership Quality
There are four big problems with the plan. One involves money—giving mayors the power to levy taxes is a key part of the plan, and it's safe to assume taxpayers will end up paying more in total. The second issue is that local government has a reputation for chaos and incompetence. Manchester was always an exception, with former city council leader Sir Richard Leese and ex-chief executive Sir Howard Bernstein having legendary status in local government circles because they ran the city efficiently. Elsewhere, Birmingham's city council declared itself effectively bankrupt in 2023, while recent strikes saw black bags full of rubbish piled high in city streets.
The third issue is that creating regional mayors causes turmoil for many existing local councils, which will need to undergo expensive changes to fit in with the new system. Finally, many Labour MPs just don't like the policy. Steve Reed, a Labour Cabinet Minister until he was sacked by Mr Burnham in July, warned: "When power moves somewhere new, somewhere else has to lose it — and that place is Parliament. This will be controversial with many MPs, including many who backed Burnham for No 10." He added: "Many Labour MPs told me they feared devolution means handing power from a Labour government to Reform and Green mayors."
Andy Burnham is conducting a huge experiment, convinced the country will benefit from following the example of Greater Manchester. We can only hope the experiment succeeds, because it may be very expensive indeed.
