Andy Burnham has been warned he must complete England’s devolution map at speed or preside over a “two-tier England” in which a firm’s prospects depend on whether it happens to sit inside a mayor’s boundary.
The warning comes from IPPR North, the leading think tank for the North of England, in a paper published as the incoming prime minister prepares a programme built around handing power to regional mayors.
More than a quarter of England’s population still lives outside a Mayoral Strategic Authority, the bodies that increasingly shape transport, housing and regeneration decisions. For business owners in those areas, that means no local champion with the powers and budgets their competitors in Greater Manchester or the West Midlands can call on.
The researchers argue that leaving gaps in the devolved map risks rising resentment in communities that feel left behind, with public confidence in political institutions already at historic lows.
Money is already moving on the strength of the mayoral model. NatWest’s recent £20 billion commitment to the North of England was pitched explicitly as a bet on devolution. Firms outside mayoral areas risk watching that capital flow past them.
The current government has already legislated, with the English Devolution and Community Empowerment Act receiving Royal Assent in April, and has signalled a willingness to go further on devolving tax powers to mayors. But the think tank warns that slow, incremental change has left Whitehall dominating decision-making, so the full benefits have yet to be felt.
Its recommendations are blunt. Complete the devolution map in England by the end of this parliament, and explore extending regional devolution to city regions in Scotland and Wales. Set out ambitious plans for fiscal devolution at this autumn’s Budget, allowing places to retain a share of taxes and borrow to invest in transport, housing and regeneration. And expand “hyperlocal” government so communities, not just mayors, shape decisions.
The fiscal point is where SME owners should pay closest attention. Rachel Reeves has already described fiscal devolution as her “unfinished business”, with consultations under way on visitor levies and devolving revenues from income, business and land taxes. Who sets and spends those taxes, and where, will matter enormously to firms’ costs and their local trading environment.
Dr Ryan Swift, research fellow and author of the publication, said: “We know the incoming PM has signalled his ambition for devolution in England, but we must move beyond incrementalism, or his efforts could be in vain.
“If the new government is serious about delivering economic growth, tackling regional inequalities, and rebuilding trust in politics we can’t continue as we are. Gradual change won’t cut it any more, this is the time to move quickly and with purpose.
“That means giving regions not just more responsibilities, but powers, resources, and democratic legitimacy to make a real difference in places all across the country. It means empowering communities as well as mayors. And it means embedding these changes constitutionally, so that we can benefit from it for the decades to come, no matter who is in Number 10.
“Now is the time, now is the opportunity. It cannot be squandered.”
Mirte Boot, interim head of IPPR North, said: “With the UK in a political trust crisis, the incoming prime minister does not have time to waste.
“We have set out a radical proposal to see devolution truly make a difference to peoples lives, with ambitious fiscal devolution and a reformed regional second chamber. Local leaders should be in charge of local decisions. We saw the impact that has had in Manchester, now we have to see it replicated across the country.
“But with this radical work must come urgency: Whitehall will resist change and populists will exploit every failure. The test now is if Burnham can act quickly enough to deliver the meaningful change this country has been waiting for.”
For a business community in which eight in ten SME owners have admitted to fears about a Burnham premiership, the test cuts both ways. If Burnham delivers what he calls “the biggest rebalancing of power the country has ever seen”, decisions on transport, skills and regeneration will be taken closer to the firms they affect. If he fails, England’s businesses will be trading in two very different countries.
