The fiscal trailblazer: Andy Burnham's tenure as Greater Manchester Mayor has been marked by an unprecedented increase in local spending, borrowing, and taxation, raising concerns about the potential implications of his approach to national fiscal policy. Critics point out that while the region has experienced growth, much of it has been funded by central government contributions and rising local bills.
One area of particular interest is local taxation. In 2018, Mr Burnham introduced a new charge on council tax bills to fund his office and priorities, starting at £9 annually for a Band D home. This charge has since skyrocketed to £61.75, representing nearly a seven-fold increase. When combining precepts for policing, fire, and mayoral functions, the total Band D bill saw a £130 annual rise over his last five years – a 42% increase.
The financial health of the Greater Manchester Combined Authority (GMCA) has also come under scrutiny, with a debt of £1.34 billion, making it the highest indebted combined authority in England. This figure is reportedly nearly two and a half times that of the West Midlands Combined Authority. The flagship bus network, a key policy initiative, operates at a net annual deficit of £227 million, with accounts showing £550,000 spent on painting 93 buses yellow.
While Greater Manchester has experienced growth, critics contend that much of this development has been funded by central government contributions and rising local bills. Conservative Chancellors have approved over £1 billion for Greater Manchester's transport settlement in 2022 and £150 million for brownfield housing in 2023. These allocations are in addition to a devolution settlement that the GMCA itself describes as the largest in England, with annual spending exceeding £3 billion. Initiatives such as free bus travel and capped fares, while announced by the Mayor, were ultimately financed by national taxpayers and increasing local charges.
The current national economic climate provides a crucial backdrop to this debate. The UK's national debt stands at £2.98 trillion, equivalent to 95% of the country's annual economic output – over £40,000 for every citizen. Last year, debt interest payments reached £110 billion, accounting for approximately 8% of all public spending and marking one of the highest levels in half a century. In May alone, interest payments hit a record £11.7 billion for the month, with borrowing in the first two months of the current financial year reaching £46 billion – a quarter higher than the previous year and exceeding official forecasts. The UK's long-term borrowing costs are currently the highest among G7 nations, with long gilt yields above five per cent. Chancellor Rachel Reeves has acknowledged that one in every £10 the government spends is allocated to servicing this debt.
Against this financial inheritance, Mr Burnham's past proposals – including calls for £40 billion in additional borrowing – have sparked concerns about his ability to tackle national fiscal policy challenges effectively. Critics argue that his approach would exacerbate existing issues and raise questions about his capacity to deliver sound economic management at a national level.