Why Andy Burnham’s devolution pledge will be tricky to deliver

📰 source: theguardian_business · 📚 research

andy burnham promised to transfer power from westminster to every postcode on the road to downing street. after two weeks in office, the size of the job is clearer, with an autumn budget set to fill in the details, starting with a plan to give england's regional mayors a share of income tax.

The uk is among the most fiscally centralised developed countries: the centre for cities says only 5% of tax revenue stays local, vs 14% in france and 22% in japan. the institute for fiscal studies estimates that 6-9% of local income tax revenues would replace central grants, but the plan only takes full effect in 2028. new mayoralties are also still being created.

challenges loom. austerity halved local government staffing, from 2.2m to 1.1m since 2009, and just 1% of places published audited accounts on time. surveys show only 35% trust local government, below the oecd average. but devolution could pay off: integrating transport in six big english cities could connect 1.2m people and generate £17bn in productivity gains, and the uk's second-tier cities badly underperform those in the rest of the g7.

why it matters: devolution pledge faces major hurdles, with income tax retention not fully active until 2028 and weak local capacity to manage funds.

source: theguardian_business
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