Mayors Gain Borrowing Power, Tax Share in Devolution Plan

English regional mayors are set to gain significant new financial powers, enabling them to borrow for major investment projects and reducing their reliance on central government funding. This "transformational" plan aims to loosen the "death grip of the Treasury" by devolving fiscal control to local leaders. A key component of the new devolution package is the ability for mayors to retain a share of income tax generated within their regions, a measure slated to take effect from 2028. This represents a fundamental shift in how regional development projects will be financed, moving away from the traditional model of Whitehall grants. Furthermore, mayors will gain control over business rates, with an estimated tens of millions of pounds in revenue becoming available to them by April 2027. This increased fiscal autonomy is intended to empower mayors to invest in infrastructure, housing, and economic development initiatives tailored to their specific regional needs. The proposals signal a move towards greater financial independence for English regions, mirroring devolution models seen in other parts of the UK. The plan, championed by figures like Andy Burnham, Mayor of Greater Manchester, seeks to unlock significant investment potential by allowing mayors to borrow against future revenue streams. This borrowing capacity is crucial for funding large-scale, long-term projects that require substantial upfront capital. Historically, English regions have been heavily dependent on direct funding from the Treasury, often leading to lengthy approval processes and a perceived lack of local control over development priorities. The new powers are designed to streamline these processes and provide mayors with the financial tools necessary to drive regional growth effectively. The shift in revenue streams, particularly the share of income tax, is expected to provide a more stable and predictable funding base for regional authorities. This contrasts with the often-variable nature of grant funding, which can be subject to political shifts and economic downturns. The implementation timeline indicates that business rates control will be granted by April 2027, with the income tax share following in 2028. These dates suggest a phased approach to devolution, allowing for the necessary legislative and administrative adjustments to be made. The overarching goal of these reforms is to foster a more dynamic and responsive approach to regional economic development across England, empowering local leaders to make strategic investment decisions that best serve their communities and economies. This initiative is expected to have a profound impact on how public services and infrastructure are funded and delivered in England's regions.