In only his second week in office, Andy Burnham is pitching this as the biggest shift of power out of Westminster in a generation. A 30 July 2026 Downing Street statement says English mayors will receive a share of income tax revenues for the first time, alongside wider plans to let local areas keep more of the gains when jobs and business activity rise. (gov.uk) The economic point matters more than the slogan. If a city region attracts investment, fills vacancies and grows payrolls, a larger slice of that tax revenue is meant to stay local rather than flowing straight back to the centre. That gives mayors a clearer financial reason to back the projects that raise output over time. (gov.uk)

The first step comes in spring 2027, when mayors are due to start retaining a greater share of locally generated revenues through business rates. Fuller detail on both business rates and income tax retention is due in a Budget roadmap, and ministers are already stressing that the offer will sit within the government’s fiscal rules. (gov.uk) This is also meant to reach beyond the existing mayoral map. According to the same announcement, places without a mayor will be supported to form strategic authorities and take on more control over local priorities, while the English Devolution and Community Empowerment Act received Royal Assent on 29 April 2026 and created a stronger legal framework for devolved powers. (gov.uk)

Why does that matter on the ground? Because transport, skills and planning decisions often fail when the body paying for them is not the body seeing the reward. The government’s package is meant to close that gap by giving local leaders more say over buses and rail, housing delivery, regeneration funding, 16 to 19 skills budgets and employment support. (gov.uk) In practical terms, a mayor who can link training to local vacancies has a better chance of lifting employment and pay than a one-size-fits-all programme set in Whitehall. The policy bet is simple: local leaders are more likely to know which commuter routes are failing, which sites are stalled and where employers cannot hire. (gov.uk)

For businesses, especially SMEs, the attraction is less stop-start bidding and more joined-up spending. If more tax stays in the area, a mayor has a stronger case for using it on the things firms notice first: faster planning decisions, more reliable buses, better access to labour and training that matches live vacancies rather than national averages. (gov.uk) For workers, the promise is equally clear. The same announcement says mayors will get greater control over employment support and 16 to 19 funding, which could make it easier to design routes back into work around local employers rather than asking people to fit a national scheme. (gov.uk)

Downing Street is leaning on existing devolved examples to make the case. The government says West Yorkshire’s Housing Investment Fund of up to £334 million is helping bring stalled land into use, while the Liverpool City Region has rolled out Tap and Go on Merseyrail and is bringing buses under local control later this year, with rail services due back in public ownership by 2028. (gov.uk) In the North East, ministers say 65,000 residents have been supported to gain qualifications in fields including construction and childcare. The message from government is that devolved powers are already producing visible results, and that the next step is to extend that model beyond the areas that got there first. (gov.uk)

The unanswered question is who carries the risk when growth is uneven. Areas with stronger tax bases are likely to find it easier to generate extra revenue, so the detail on equalisation, grant replacement and transition will matter just as much as the headline promise of retention. That is where fiscal devolution often becomes harder than the launch speech. (gov.uk) There is already a hint of that tension in the finance papers. Some respondents backed a direct share of business rates for mayoral authorities, while others warned it could reduce the share available to local councils or said there was not yet enough detail to judge the model properly. Government papers also say any change to grants would be co-developed with mayoral authorities and not made without local consent. (assets.publishing.service.gov.uk)

Still, the direction is clear. The government is trying to move from devolution as a grant programme to devolution as a tax-and-growth model, with mayors given a more direct stake in the performance of their local economies. The same press release says ministers will have to justify keeping powers in Whitehall under a local-first principle, while No10 North in Manchester has been set up to keep devolution tied to economic decision-making. (gov.uk) If ministers can keep the system simple, stable and fair, this could give regions a stronger hand in shaping jobs, transport and housing. If the Budget roadmap ducks the hard questions on redistribution and accountability, it will look more like a political reset than a funding reset. That is the test for businesses, workers and local leaders over the next few months. (gov.uk)