Andy Burnham must hand mayors more fiscal control than just a portion of income tax, report says

The new Prime Minister is to set out his plans on devolution on Friday, as the final subject in four long-term strategies, after social care and technical education.

Andy Burnham must announce a “transformational programme of fiscal devolution” to grasp the benefits of mayors, a new report has found, and hand down more than just income tax raising powers.

The new Prime Minister is to set out his plans on devolution on Friday, as the final subject in four long-term strategies, after social care and technical education.

While he was mayor, Greater Manchester was a trailblazer strategic authority, getting powers ahead of places like West and South Yorkshire.

Mr Burnham attributes using these to, for example, bring buses back under public control as helping drive Manchester’s economic growth.

He is expected to announce that mayors will be able to keep a portion of income tax to spend on projects in their own areas, such as the West Yorkshire mass transit network.

However a new report by Re:State has urged Mr Burnham to go further, and have other powers to a number of taxes.

It says: “Rachel Reeves’ Mais Lecture rightly reopened the debate by proposing the assignment of a share of income tax to strategic authorities, and mayors welcomed that direction of travel.

“Yet England needs a durable fiscal settlement built on three principles, which a single tax alone cannot provide: greater fiscal autonomy, stronger incentives for growth and a transparent system of redistribution.”

The report, titled Devolution Revolution: the case for radicalism, calls Mr Burnham to “embark on a transformational programme of fiscal devolution”.

It says he should devolve “a balanced basket of taxes”, including income tax, that is available across England “so that no postcode is left behind”.

This would move English devolution from “an ‘earned autonomy’ model to one based on ‘embedded autonomy’”.

The report has received backing from West Yorkshire Mayor Tracy Brabin, who penned the foreword alongside Labour MP Chris Curtis.

They say: “Too often, mayors and strategic authorities are expected to solve problems without the powers, funding or institutional certainty needed to do so.

“Funding remains fragmented, accountability arrangements are overly centralised, and too much time is still spent negotiating with Whitehall instead of delivering for local people.

“At a time when we need to raise productivity, rebuild public services and restore confidence in politics, this matters enormously.”

Ms Brabin has found this with her £2.5bn plan to bring trams back to the streets of Leeds and Bradford.

Her initial timeline was pushed back, after a critical review by the Treasury, and she is also required to put together a business case for a bus network to comply with Department for Transport rules.

“The Government, under Andy Burnham’s leadership, can chart a new course,” the added.

“With a decade as a Mayor under his belt, the Prime Minister knows that the UK’s future prosperity will depend on whether every part of the country has the ability to shape its own future, build on its own strengths and respond to the needs of its own communities.

“This report offers a thoughtful and ambitious contribution to that debate. It recognises that devolution is about far more than economic growth.

“Growth matters because it creates opportunity, raises living standards and provides the resources to sustain excellent public services. But devolution must also strengthen democracy, improve public services and give communities a greater sense of ownership over the places they call home.”