Mayors to claim share of income tax
Prime Minister Andy Burnham said that the move to allow mayoral combined authorities to partially retain business rates and income tax will “make good” on his promise for good growth in every postcode.
Mayors will have retain business rates starting in spring 2027 with income taxes due to follow in 2028. More details are to come in the Autumn Budget.
Local government secretary Angela Rayner described the move as “the first step in our plan to rewire this country”.
She added: “Our devolution revolution is about bringing an end to the begging-bowl culture of the past, and instead making sure our local leaders have the tools they need to drive the change that communities have been crying out for.
“We need every region to be firing on all cylinders if we want good growth in every postcode, and we will do everything in our power to make that a reality.”
- READ MORE: The big ask for Burnham
Burnham’s ambition for Mayors is for them to take control over local rail and bus services, acquire stronger planning and regeneration power, and oversee 16-19 funding and employment support.
The modus operandi in Whitehall will now be “local first”, according to No10 Downing Street. Going forward, ministers will need to justify why they should retain power in Whitehall rather than devolve it.
The news was welcomed by Liverpool City Region Mayor Steve Rotheram, who called it an important step.
“When our economy grows, more of the value created here should be reinvested here too,” he said. “Giving mayors a direct stake in that success means we can back the projects that create more opportunities – building the public transport network, homes, skills, and infrastructure that help our economy grow even further…
“This gives us the chance to build on that progress and make every pound of growth work harder for the 1.6m people who call our area home.”
As well-established combined authorities, Greater Manchester and Liverpool City Region are well placed to benefit from the reforms early on. Cumbria Combined Authority and Cheshire and Warrington Combined Authority will elect their respective mayors in May.
Lancashire, however, may need to wait to receive the benefits of Burnham’s programme. The county is without a mayor and will not elect one until 2028.
A worry that Lancashire will miss out led Azhar Ali, the leader of the opposition at Lancashire County Council, to write Burnham requesting that the mayoral election be brought forward to 2027.
Today’s announcement from Whitehall builds on a promise made by former chancellor Rachel Reeves in March. During her Mais lecture, Reeves had said the 2026 Autumn Budget would include a model for local areas to retain a portion of national tax revenue.
“What I am describing is a genuine break with the past: a generational opportunity for Britain’s regions to make their own future,” she had said at the time.
While Reeves had not confirmed that would mean income tax, she did say that it would be one of the considered avenues.
How long before the Londoners pipe up about paying for everybody else. The Done Brothers are documented as being the biggest contributors to the Treasury, so will their tax stay in GM?
By Elephant
What about Northeast of England? Coz Northwest and Northeast is North of England. “The North” it would be in Northeast of England either.
By G J Kitchener
Hi G J – this is for all the Mayors, including the Mayor of the North East.
By Julia Hatmaker
More money for Rotheram to waste on vanity schemes without any substantial delivery over the last decade.
By Anonymous
@Julia Hatmaker Thank for let me know. Hope you have a lovely weekend 👍🏻
By G J Kitchener
Stevie and his mates are rubbing their hands together more dosh to waste on whatever they want.
By Anonymous
Dont let Rotherham deal with anything he is absolutely useless
By Anonymous
The Audit Commission needs to be recreated, to avert any problems arising from harebrained spending proposals, or worse.
By WayFay
This will no doubt as usual be on the administrative boundaries rather than travel to work boundaries that puts Liverpool city region at a disadvantage. The boundaries were drawn far too tightly for LCR
By Anon
Massive step in the right direction. Just a shame Bernstein and Boylan aren’t here to witness it
By Paul Unger
Real devolution would involve the proper resourcing of local Councils but that clearly isn’t on the table.
By Anonymous
London pays way more in tax for virtually every part of the country, city exceptions being York and Edinburgh. We do need to let places reap the rewards of improving their economy, but let’s be clear full fiscal devo would mean ending the subsidisation of the north by the south-east
By Other People's Money
Liverpool will only improve if people change their voting tactics as Labour have been truly awful for Liverpool as a whole i mean awful.
By Anonymous