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Devolution has been at the centre of Andy Burnham's leadership campaign since he embarked on the road to Downing Street.Sure enough, among the slew of proposals thrown out in the new regime's early policy blitz was a cabinet document titled Rewiring the State.While much of the detail will be laid out in a White Paper to accompany October's Autumn Budget, the most eye-catching of the policies outlined was assigning mayors a portion of local income tax instead of grant funding from April 2028. Both mayors and councils would also retain a greater portion of business rates in a bid to close ‘large regional disparities' and ‘rebalance public investment'.Policy-makers face challenges as they work on the finer details of the scheme, the Institute for Fiscal Studies' head of local government finance, David Phillips, told The MJ.Balancing rewarding growth in the tax base and the need for a redistribution mechanism to recognise wide variation in tax receipts across England will be key.‘There is inherently a trade-off,' he said. ‘No-one is better off or worse off at the initial redistribution, what matters is what happens in subsequent years. There needs to be no overnight winners or losers.'Mayors would also be hostage to any changes made by central government to income tax. Phillips suggested applying the proportion they receive to individual bands rather than the overall tax received.The rest of the statement's contents received far less media attention, but was no less ambitious. It promised to ‘give areas more local democratic control over their public services from health to policing to education'.‘Changes to tax thresholds would affect how much councils are getting. This reduces exposure to policy changes by Westminster that they have no control over,' he said.‘Mayors would be much more exposed to changes in the top rate than the bottom rate – that might affect their incentives to boost the income of well-off people compared with lower earners.'National headlines were dominated by calls from Reform UK and the Conservatives for what Tees Valley mayor Lord Houchen termed a ‘rebate scheme', to use the funds to reduce the tax burden in their areas.Director of consultancy Groundwork Research, Jack Shaw, concluded that it would be difficult to implement under current legislation, but that the episode illustrated what could be a continuing trend.‘Advocates of devolution are not a homogeneous group, and greater autonomy is likely to expose, rather than diminish, ideological differences over how devolved powers should be exercised,' he said.The rest of the statement's contents received far less media attention, but was no less ambitious. It promised to ‘give areas more local democratic control over their public services from health to policing to education'.This will be achieved by aligning public service boundaries, with ‘local police units' that match local authority areas. Regional police forces, fire and rescue services and Integrated Care Boards would align with the boundaries of strategic authorities ‘by the end of the Parliament'.This would enable devolving and pooling of funding for preventative services, ‘allowing strategic authorities and constituent local authorities to invest in joint support, as long as national standards are being met'.The statement sets out moves to bolster mayors' planning and regeneration powers, speed up approvals for local transport schemes, bring rail and bus services under greater local control and powers over 16-19 skills funding and employment support, for which much of the groundwork has been laid in the English Devolution and Community Empowerment Act.It explicitly laid out a vision for a shrinking of Whitehall as powers shift to regional level, with staff secondments and ‘transferring funding and resources from government where functions are devolved'.Burnham said: ‘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 Prime Minister. The whole of government will now pull together behind the people and places that desperately need our support.'The statement was accompanied by the conferring of established mayoral strategic authority status to four more areas, bringing the total to 11. Available to combined authorities after 18 months, the recognition enables them to access more devolved powers and freedoms.Among them is York and North Yorkshire. Speaking to The MJ, mayor David Skaith said he hoped to see the end of a ‘grey area of devolved funding' requiring submission and central approval of business cases and proposals and strict limitations and access to a visitor levy would be ‘a game-changer for an area like us'.He added: ‘Nationally, we've not had enough focus on rural areas – it has been delivered through an urban setting. For us, our impact is equally important delivering three homes in a rural village, for example, but funding allocations have not delivered for small projects.'Skaith was more cautious about the new powers on offer. He said: ‘It needs to come with resources and funding.‘Expertise is quite limited – sending civil servants into combined authority areas and seconding to mayors' teams is really important. We need expertise to do it.'He added: ‘It's the start of a journey – we have to prove we are capable to take on these new responsibilities.'Chief executive of the Chartered Institute of Public Finance and Accountancy, Owen Mapley, concurred. He said: ‘Government must consider whether systems and organisations have the capacity and capability to deliver these reforms, alongside the transparency, reporting and accountability mechanisms needed to match the proposed increases in financial and delivery responsibilities for regional and local leaders.'The cabinet statement recognised that its proposals ‘rest on strong, capable strategic and local authorities that are able to use their powers effectively'. It set out a vision of having ‘strategic authorities in place everywhere by the end of 2028' and has since written to all councils inviting proposals. Where discussions with the Ministry of Housing, Communities and Local Government were already under way, it has asked for their preference for mayoral or non-mayoral devolution by the end of the month and will announce the next wave of strategic authorities from September.The Government said that it ‘will not impose mayors on areas that do not want one', but stressed that ‘the suite of powers available to areas with mayors will be commensurately greater'.While broadly welcoming the content of the document, chief executive of the Local Government Information Unit, Jonathan Carr-West, said there was a ‘lack of clarity about the role of local authorities'.He added: ‘There's a risk that this is a settlement for mayors and not a settlement for local government.'Mapley added: ‘It is right to be ambitious about the benefits that could flow from this approach, but we must also acknowledge that these are substantial changes that will be pursued against a backdrop of fragile and overstretched public services, many of which are already grappling with the implementation of major restructuring and policy reforms.'

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DEVOLUTION

Untangling the wires to progress

By Martin Ford | 12 August 2026

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