Can John Healey deliver Burnham’s make-or-break devolution agenda?
Devolution is Andy Burnham’s preferred growth lever. Maurício Alencar explores how devolution under Chancellor John Healey could save Britain – or destroy it. In 1998, two of the closest aides of then-chancellor Gordon Brown produced a report into the regional economic divide in Britain. The report, called ‘Towards a new regional policy: Delivering growth and [...]
John Healey, currently the Chancellor of the Exchequer, is tasked with reviving Labour's devolution agenda under the leadership of Andy Burnham, the Shadow Chancellor. Devolution has long been a cornerstone of Burnham's political philosophy, aimed at spreading power and investment across the country to stimulate economic growth.
In 1998, Ed Balls and Healey authored a report proposing the creation of Regional Development Agencies (RDAs) to "work with business" and boost investment. The RDAs were later abolished under George Osborne's austerity measures, but the debate over their potential benefits and flaws persists.
Burnham, who has long championed devolution, has dedicated himself to the cause since assuming the role of Shadow Chancellor. He introduced a £1 billion Good Growth Fund in 2025 for Greater Manchester, one of the largest of its kind, dwarfing the size of London mayor Sadiq Khan’s fund. A key aspect of Burnham and Healey's plan is to allow local authorities and mayors to retain a larger portion of tax revenues generated within their communities, which they argue will incentivize local investment and growth.
However, experts warn that such a system could exacerbate regional disparities if not carefully designed. Distributing tax revenue based purely on geographical area, such as a flat percentage of income tax receipts, may disproportionately benefit wealthier regions like London. Oxford Economics researcher Liam Sides argues that such a system could create a "self-reinforcing cycle of faster growth" for London, potentially leaving less affluent regions behind.
He suggests that tax revenues should be distributed based on more nuanced criteria, such as the rate of growth, to ensure that all regions benefit from the devolution process.
Professor Philip McCann, an urban and regional economics Professor, highlights the importance of getting devolution right, as any missteps could deepen economic divides and undermine the very growth Labour aims to achieve. The debate over how to design a fair and effective devolution scheme remains one of the most pressing challenges facing the UK government in the coming years.
Written by urgent.news from City AM's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
