Since 2014 and the creation of the Northern Powerhouse under Prime Minister David Cameron, to Boris Johnson in 2019 proclaiming the policy of “levelling up”, occupants of Downing Street have extolled the virtues of regional devolution.
Andy Burnham’s initial outline is to allow greater sums of money collected in the regions through various forms of taxation to be kept in the region.
Historically, taxes collected by local councils such as business rates were sent to Westminster and then redistributed by central government.
Mr Burnham’s announcements should be treated in two parts.
The pledge to allow regional mayors to keep a proportion of local business rates is not new. Since 2017, some councils in Yorkshire have been involved in various pilots where such a measure has been tried before.
Given the huge cuts councils have had to make in the following years, it can hardly be claimed the policy has been fiscally revolutionary for local areas.
The idea of allowing mayors to keep a proportion of income tax is a new proposal.
For a region like Yorkshire keeping just 1-2% of income tax a year could gift all the region’s mayors combined additional spending of somewhere between £200m-£300m per year, according to HM Treasury figures analysed by the BBC.
Giving local leaders a greater say over how money is spent will be broadly welcomed across the political spectrum, but what remains to been seen is how this policy will close the regional inequality gap.
For example, according to government figures, each person in London gets £2,400 more public money spent on them each year compared to each person in Yorkshire & the Humber.
It’s hard to see how this policy will close that gap.
We await the finer details to be announced by Mr Burnham which will come in the run-up to the budget in the autumn. But on face value, it looks like local mayors will have a greater say in the future on how public money is spent.
But there is no explicit pledge by the government to increase the overall amount of public money being spent in Yorkshire or other regions across the country.
