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Nearly 30 years ago, a then obscure Labour backbench MP and a special adviser pipped as a future chancellor of the exchequer penned a joint paper on regional economic growth.Fast forward to 2026 and while Ed Balls never reached No 11 Downing Street, his co-author John Healey has just made it there instead.Their 1998 paper shows how long the recently appointed chancellor, who of course went on to become local government and then housing minister in the last Labour government, has been thinking about regional development issues.‘John is a long-standing fan of place-based economic growth,' says Henri Murison, director of the Northern Powerhouse Partnership (NPP). During his first stint at the Treasury as a junior minister in Tony Blair's government, Healey's portfolio as economic secretary covered regional policy.Stephen Jones, director of Core Cities UK who worked as a civil servant on regional policy at the communities and local government department under Healey, says: ‘Even if he (Healey) didn't have a Prime Minister making this a massive priority, he'd be pushing at this. The fact that it's going with the grain of the Government's overall agenda means it's going to be a big feature and a big priority.'Andrew Carter, chief executive of the Centre for Cities, recalls that the now chancellor's role included acting as the Treasury's link man with then deputy prime minister John Prescott in his role as secretary of state for local government and the regions.This engagement with devolution extended, of course, to Healey's spell as local government minister in the late noughties and then perhaps more surprisingly on his return to government as secretary of state for defence, Murison points out.The Defence Investment Programme, the row over the funding of which triggered Healey's resignation from government earlier this year, featured a ‘significant regional place-based element' by channelling investment to West Cumbria's Barrow shipyards, he says.Stephen Jones, director of Core Cities UK who worked as a civil servant on regional policy at the communities and local government department under Healey, says: ‘Even if he (Healey) didn't have a Prime Minister making this a massive priority, he'd be pushing at this. The fact that it's going with the grain of the Government's overall agenda means it's going to be a big feature and a big priority.'Healey's track record suggests he sees the value of an active state, says Carter: ‘He saw the need for an active state intervening and supporting, rather than being a bit more laissez-faire and hands off. In old school money John is a classical Keynesian in the sense of how public investment and public engagement can help the market and private development to happen.‘He's been chosen to be chancellor by a Prime Minister that obviously has that as an ethos and set of principles as well.'However as a Treasury minister, Healey saw devolution through the lens of how it could support economic growth, he says: ‘John's mandate was to make sure that the objective to try and boost the economic performance of places was front and centre of the Regional Development Agencies (RDAs).‘He was interested in growth, and then about how it can be delivered in all parts of the country,' Carter says, adding that Healey's track record suggests he views the objective of devolution as achieving growth rather than being the end goal in itself.And while Burnham's vision of Manchesterism has captured the headlines, Healey's constituency home town of Rotherham offers a different prescription for achieving regeneration, says Murison.The regeneration over which Burnham has presided as mayor of Manchester has relied on transport infrastructure investment to boost the city centre but this will not work everywhere, he says: ‘Once you get further away from the big cities, you need to have a different economic theory of change.'Rotherham hosts along with Sheffield what Murison hails as the ‘biggest success story' of noughties regional policy, the partly RDA-funded transformation of the former Orgreave Coking Works. While many similar former coalfield sites now host call centres, the Advanced Manufacturing Park's tenants include aerospace giant Boeing's only non-US factory.What he terms ‘Rotherhamism' may show how Burnham's aim to reindustrialise the UK could be turned into practice, he says: ‘You can see in South Yorkshire quite a strong exposition of what his approach might mean for the rest of the country.'And this offers a potentially more sustainable way to generate economic activity than wasting ‘a lot of money on quite tokenistic town centre renewal', Murison adds.The Burnham-Healey vision began to be fleshed out in the new PM's Cabinet statement on Rewiring Britain, which was published at the end of July.This week saw Healey confirm in a speech in the Midlands that mayoral strategic authorities' (MSAs) central government grants will be replaced by a share of the income tax generated in the area they cover.Of course, some of these ideas on fiscal devolution were being worked by Healey's predecessor Rachel Reeves before she left the Government.Progress since the election has not been as rapid on fiscal devolution as many of its advocates would have hoped, says Nigel Wilcock, executive director of the Institute of Economic Development.‘There has been quite a lot of talk before the General Election that this was going to be a big element of the administration's work and that got slightly derailed because of the changes at the Ministry of Housing, Communities and Local Government,' he says, referring to Angela Rayner's resignation as communities secretary last year, prior to her more recent return to the job.However, change on this front will happen at a quicker pace following Burnham's recent ascent to Downing Street, Wilcock says: ‘I don't think any of us are left in any doubt that this is one of the main themes of the Government.'Carter agrees. ‘This is at the heart of his agenda rather than being part of his agenda,' he says, adding that this top-level impetus will make any lingering ‘inertia or reluctance' within Whitehall surrounding devolution easier to overcome.Chris Murray, Jones's predecessor at Core Cities says he will be ‘very surprised' if next month's Budget contains no moves to devolve adult skills budgets to MSAs.Murray, who worked closely with Healey at Core Cities when the latter held the local government and housing briefs in government and opposition, says that as a constituency MP for an area hit hard by coal mine closures the chancellor will be keenly aware of the importance of locally tailored skills programmes.This focus on making government spending more responsive to local pressures is also reflected in the Rewiring Britain Cabinet statement's pledge to give MSAs more control over how national agencies, like the Arts Council, spend their money.This will be important for getting projects off the ground, says Carter: ‘Rather than having to negotiate with and try to engage with Homes England, for example, and draw them into the patch, you start from a position that the MSAs have decided and are clear about what they want to do on the housing and regeneration front.‘If you're committed to the perspective that the MSAs are the preeminent institution to organise and coordinate economic investment, then other institutions need to be deployed to deliver what they (mayors) see as the things that need to be done rather than constantly in a conversation negotiating.'Control over more levers may mean less chance of fiascos, like the dearth of late-night public transport on offer to spectators who attended the recent European athletics championships in Birmingham's Commonwealth Games stadium, he says: ‘If they (mayors) are the custodian of their place, by definition they have to take that integrated perspective.‘If we're going to put this new facility in and we're going to get thousands of people coming to it and leaving it more particularly at the same time, there's a transport question.'But while it is important for some of these national agencies like the Arts Council to have a more regional focus, it is also important not to break them up entirely, says Murray: ‘Some of those agencies come with capacity that's really important.‘There does need to be more flexibility in the way money is spent at the local level but most authorities would still benefit from the capacity that Arts England brings,' he says, adding that a national body like this is better able to make a case for funding at a national level.The Cabinet statement also raised the prospect that the state-backed Public Financial Institutions, like the National Wealth Fund, will play a role backing the mayoral Good Growth Funds that Burnham wants to see in every MSA.In his speech this week, Healey said the lending of these so called PuFins (Public Financial Institutions), worth around £200bn, would in future be more closely aligned with public policy priorities.These institutions can play a role in supporting mayoral economic development initiatives, Wilcock says: ‘They sit in a space where the banks may be fearful of treading because the returns may take a little bit longer to arrive or the interest rate is a little bit smaller.'But such lending is unlikely to be ‘transformational' for big ticket regeneration projects, he says: ‘There are some projects that somebody a bit more patient and a bit less commercial might fund but it's at the margins.'Recent weeks have seen an outbreak of speculation that Healey may take advantage at next month's Budget of a loosening of fiscal rules, bequeathed by Reeves, exempting loans by these bodies to companies from being counted on the Government's balance sheet.However, if such a move further scared the bond market about the UK's creditworthiness, this short-term borrowing lift would not be worthwhile for local government, says Jones: ‘We wouldn't want access to borrowing that then led to a run on the pound.‘The challenge he (Healey) faces is a challenge that anyone would face, which is a pretty grim macroeconomic and fiscal position.'

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REGENERATION

MJ Regeneration: A Budget to build from

By David Blackman | 17 September 2026

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