New Prime Minister Andy Burnham said the huge devolution shake-up will allow local leaders to keep more of the cash residents pay – and invest in their communities
Andy Burnham is set to unveil plans to give mayors in England a share of income tax and business rates for the first time as part of a huge devolution shake-up.
The new Prime Minister and former Greater Manchester Mayor said it will allow local leaders to keep a slice of the cash collected from their residents to invest in their communities.
It is being billed as the biggest transfer of power and funding from Westminster in a generation.
The government said the rate of income tax which billpayers face will not change as a direct result of the reforms. But details – including the level of income tax retention for local leaders – will be set out in the new Chancellor John Healey’s first Budget in the autumn.
Ahead of an announcement on Friday, Mr Burnham said: “I said we’d take power out of Westminster and carry it into every postcode in the country. Today, we make good on that promise. Under our plans, more of the taxes raised in a community will stay in that community.”
He added: “Soon, every local leader will have the power and resources to improve public transport, build homes and create jobs. 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 PM.
“The whole of government will now pull together behind the people and places that desperately need our support. This is how we’ll bring back hope and bring power home to you.”
Mr Healey said: “The people who best understand what skills employers want, what transport an area needs and where investment can make the biggest difference are those who live there.
“For the first time we’re giving mayors a share of income tax so communities directly benefit when their economy grows – passing power out of Westminster and driving growth in every postcode.”
Former Chancellor Rachel Reeves also announced in her Mais lecture earlier this year that the Treasury was looking at giving regional mayors “control of a share of some national taxes which have, for too long, been allocated by central government”
Working with the new No10 North, the government also said local leaders will also gain more control over services including housing, transport, and skills.
This will include powers to bring rail and bus services under greater local control and get local trams and metros built faster.
Angela Rayner, the Secretary of State for Housing, Communities and Local Government, 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.”
