Chancellor John Healey has received a mandate from Prime Minister Andy Burnham to lead the government's devolution agenda. This initiative aims to devolve fiscal power with the goal of delivering "growth in every postcode."
Healey previously co-authored a 1998 report, 'Towards a new regional policy: Delivering growth and full employment', which advocated for regional development agencies (RDAs) to encourage local leaders and boost investment. These RDAs, which spent billions, were later abolished in 2010 under George Osborne's cost-cutting programme.
Prime Minister Burnham has made devolution a central pillar of his government's mission, describing the opening of Number 10 North as the "best day of my life." In 2025, Burnham established a £1bn "Good Growth Fund" for the Greater Manchester region, funded by local government pension pots, government grants, and the National Wealth Fund.
Current plans for the upcoming Budget suggest that mayors are set to receive a larger portion of taxes "raised in a community." The intention behind this is to encourage local leaders to drive growth by allowing them to retain more cash. However, concerns have been raised regarding potential "postcode lotteries" and a loss of control over public finances.
The UK currently has one of the world's most centralised governments, contributing to wider regional inequality compared to countries like Germany and Sweden. While some Labour centrists view devolution as both ideologically coherent and economically beneficial, critics consider it a distraction from a broader pro-growth mission.