Andy Burnham, Mayor of Greater Manchester, said Thursday that regional mayors in England will receive a share of the income tax collected in their regions [1].
This shift represents a significant change in how the UK manages its finances, moving away from a centralized system where the national government controls the vast majority of tax revenue. By allowing regions to retain a portion of locally generated wealth, the government aims to reduce the dependence of local authorities on funding decisions made in London.
Burnham said the initiative is intended to empower regions by giving them more direct control over their economic futures [3]. The plan aligns with a broader push by the prime minister to decentralize political and economic power, a process known as devolution, to move authority out of Whitehall [2].
"I will give mayors in England a share of the income tax generated in their regions," Burnham said [1].
The prime minister described the strategy as a way to distribute authority more equitably across the country. The prime minister said the move will "give power to every postcode" [4].
While the specific percentage of tax to be shared has not been detailed, the policy seeks to create a more sustainable financial model for regional growth. The announcement on July 30, 2026 [1], marks a turning point in the relationship between the central government and England's mayoral areas, granting local leaders a tool to incentivize investment and manage public services with more autonomy [2].
Local leaders have long argued that the current system stifles regional development by requiring constant negotiation with national ministries for basic funding. This new arrangement is designed to bypass those bottlenecks by providing a predictable stream of local revenue [3].
“The move will give power to every postcode”
This policy shift signals a transition toward fiscal federalism in England. By linking local spending power to local tax generation, the UK government is shifting the risk and reward of economic growth onto regional mayors, potentially creating wider economic disparities between high-growth urban hubs and struggling rural areas.
