Region has chance to shape its own future with new funding powers for mayors: David Prescott

In June 2025, I argued in The Yorkshire Post that England’s devolution journey had reached a crossroads and giving mayors more responsibilities was no longer enough. I called for fiscal devolution - allowing mayoral regions to retain a share of the income tax and business rates they generate so they have the financial certainty to invest in their own future, rather than relying on short-term grants from Whitehall.

The Government’s Rewiring the State reforms are an important step in that direction.

From 2028, mayoral regions will receive a share of locally generated income tax alongside greater retention of business rates. But the reforms go much further than fiscal devolution.

They give mayors greater responsibility for transport, housing, planning, skills, employment support and economic development, enabling decisions that have too often been made in separate Whitehall departments to be brought together under a single regional strategy.

That creates the opportunity to align investment, infrastructure and public services behind one goal: growing the local economy.

Between 2010 and 2020 from the Tory-Lib Dem Coalition to Conservative government, Hull City Council lost around £130 million in central government funding – a reduction of approximately 55 per cent.

Councils were expected to do more with less. That wasn’t genuine devolution. It was the devolution of austerity.

Real devolution gives local leaders not just greater responsibility, but the financial certainty to invest for the long term.

Housing is where these new powers could have the greatest impact. We should launch the biggest council house building programme our region has seen for a generation and deliver thousands of genuinely affordable homes.

Alongside that should sit a ten-year mission to retrofit existing homes with better insulation, ventilation, modern low-carbon heating, solar panels and smart technology. The result would be warmer homes, lower bills, healthier families and lower carbon emissions.

The Government has already laid the foundations through its Warm Homes Plan. Fiscal devolution gives local leaders the opportunity to bring those programmes together into a single regional strategy.

This is precisely why I argued for retaining a share of locally generated income tax and business rates. The real prize is not the tax itself, but what those stable revenue streams make possible.

A predictable share of income tax and business rates would enable the Combined Authority to borrow prudently against future revenues to finance major investment. Instead of relying on one-off grants from Whitehall, we could plan over decades rather than years.

That borrowing could fund council housing, transport, regeneration and modern infrastructure, while giving businesses confidence that the region has a long-term plan for growth.

A sustained programme of housebuilding and retrofit would support thousands of jobs across construction, manufacturing, engineering and local supply chains.

Greater control over skills funding should allow schools, Hull College, East Riding College, our universities and employers to work together to train local people for growing industries including offshore wind, advanced manufacturing, digital technology, clean energy and construction.

Transport deserves the same ambition. Better buses, rail, housing and employment should no longer be planned separately.

We should build on affordable bus fares and set ourselves a bold ambition: free bus travel for everyone under 21.

Removing the cost of travel would help more young people reach education, apprenticeships and work, while supporting local high streets and businesses.

Hull must also be part of Northern Powerhouse Rail, ensuring our region is fully connected to Leeds, Manchester and Liverpool.

Growth will increasingly depend on how effectively we use data and artificial intelligence. The University of Hull’s DAIM (Data, Artificial Intelligence and Modelling) Centre combines expertise in AI, data science and economic modelling to help businesses improve productivity and governments make better decisions.

Working with the Combined Authority, it could guide investment in housing, transport, skills and economic development, helping make Hull and East Yorkshire a national leader in evidence-based policymaking.

Twenty years ago, my father, John Prescott, championed the Northern Way because he believed the North achieved more when it worked together. These new reforms give us the opportunity to realise that vision by giving regions not just more responsibility, but the financial tools to shape their own future.

Fiscal devolution is not an end in itself. It will give Hull and East Yorkshire the ability to borrow responsibly against future income tax and business rate revenues, build more council homes, improve transport, develop world-class skills, grow local businesses and ensure more of the wealth created here stays here.

For the first time in decades, our region has the opportunity not simply to ask Whitehall for permission, but to shape its own future. We should seize it.

David Prescott is CEO and Founder of Larkin PR