Devolving real power could lead to regional growth – but Andy Burnham will need to be brave

Source: The Conversation – UK

Andy Burnham says he wants to change how Britain works. Part of his plan involves shifting power out of London to the regions, in the belief that economic growth for the whole country will follow.

The prime minister refers to this as “rewiring the state”. He has long argued that the UK’s economic challenges cannot be separated from its political centralisation.

And there is plenty of evidence to support this claim.

For the decline of former industrial towns in places such as north-east England, the Midlands and south Wales was not just the result of deindustrialisation. It was also caused by decisions being increasingly concentrated in Whitehall, with the places most affected by economic change losing influence over investment, housing and development.

Burnham’s criticism is that these areas suffered a “double deficit” where both political and economic power were lost.

And it’s true that for decades, Britain has been run on a familiar London-centric model. This involves Whitehall identifying problems, and then designing policies to fix those problems. In doing so, it also controls funding, sets conditions and monitors the results.

The difficulties of this model can be seen in previous attempts at urban regeneration. Securing funding from Whitehall for local projects has frequently been fragmented, overly competitive and designed around central priorities rather than local needs.

Local authorities argued that they spent significant time bidding for funding and meeting Whitehall requirements, while lacking the freedom or long-term certainty needed to address the underlying causes of economic decline. In many places, the results fell short of the broader ambition to reduce regional inequalities.

Genuinely “rewiring the state” offers the chance to break from that model. But only if the government is prepared to surrender real power.

This doesn’t mean that every decision should be made locally. It shouldn’t.

Central government has vital responsibilities when it comes to major infrastructure and national economic policy. But within that framework, different places need the freedom and the resources to pursue their own economic futures.

A city, a coastal town or a rural area will all face different challenges. This is why a one-size-fits-all policy designed in London cannot possibly reflect every place’s strength and weakness. The goal should therefore be setting common national objectives (such as on health, education or economic growth), but allowing local government the genuine freedom over which ones to target, their priority of order, and how to achieve them. That is the promise of devolution.

But fiscal devolution – the transfer of financial decision-making power and responsibility to places outside London – is more of a test.

The government’s proposals for greater retention of business rates, a share of locally generated income tax for mayors and new local taxation powers could represent a significant change.

But the detail matters enormously, and these have yet to be developed. Fiscal devolution has to mean more than swapping one central government grant for another funding mechanism, with Whitehall still pulling the strings.

And again, different places have different tax bases and different economic strengths and needs. Giving wealthy areas more capacity to raise revenue, without a robust system of redistribution, risks entrenching the very geographical inequalities devolution is supposed to tackle.

Crossed wires?

If Burnham is serious about handing over genuine political and economic power to places outside London, local government needs to be able to use those powers. This in turn requires expertise in things such as economic planning, project development, procurement and financial management.

But for years, centralisation has reduced the capacity of local government and weakened its capabilities. This means when power is finally devolved, government can point to those very weaknesses as evidence that local institutions are not fit to govern and use this as justification to reclaim authority.

Instead, government should treat the idea of building capacity and capability as an investment in economic growth, rather than an administrative expense which can be squeezed.

Devolution requires patience and a willingness to learn through experimentation, rather than constant institutional change and short-term policy churn. Success should be judged not only by GDP and productivity, but on whether it improves the life chances and wellbeing of the people who actually live there.

Rewiring the state offers a chance to create a genuinely devolved system, where empowered local places pursue their own paths to prosperity within a national framework. It’s as much about what Whitehall stops doing (including interfering!), as the powers it hands over.

London should continue to set goals and standards, support learning and redistribution, then step back and let local institutions lead. For without real powers, resources and freedom from Whitehall control, it risks becoming just another administrative reshuffle.

David Bailey receives funding from the Economic and Social Research Council through its UK in a Changing Europe programme.

Felicia Fai has previously received research funding from the EPSRC and the ESRC, though not in relation to the subject matter of this article.

Phil Tomlinson has previously received research funding from the EPSRC and the ESRC, though not in relation to the subject matter of this article.

Original source: https://analysis1.mil-osi.com/2026/09/28/devolving-real-power-could-lead-to-regional-growth-but-andy-burnham-will-need-to-be-brave/