Andy Burnham, Mayor of Greater Manchester, has proposed a new income-tax sharing scheme to allocate additional central government funds to devolved regions.
The plan seeks to shift financial control from the center to local leaders. By securing a share of income tax, mayors would gain the ability to fund long-term projects without relying solely on centrally managed grants.
Burnham said the proposal is intended to provide regional mayors with more financial “muscle” to invest in transport, jobs, and housing. This approach would allow cities to tailor their spending to specific local needs, a shift that could fundamentally change how urban areas are funded in the UK.
Under the proposed tax-sharing plans, some regions would see significant increases in available capital. For example, London could receive more than £2 billion extra [1].
Richard Parker said the move would provide more muscle to invest in the region. The proposal focuses on creating a sustainable revenue stream that grows alongside the local economy, reducing the volatility of annual budget negotiations with the central government.
Burnham said the potential impact of the scheme is “phenomenal”. While the proposal is currently a framework for discussion, it represents a push for greater fiscal autonomy for the UK's largest metropolitan areas.
““Phenomenal””
This proposal marks a significant push toward fiscal devolution in the UK. If adopted, it would move the country away from a centralized funding model toward one where regional economic growth directly increases local investment capacity, potentially reducing the political friction between city halls and the national treasury.
