UK Government Proposes Devolution of Tax Revenue to Empower English Mayors and Boost Local Economies
July 31, 2026
A major devolution move unfolds as English mayors would be allowed to retain a share of income tax and business rates raised in their regions, shifting fiscal power from Westminster to local authorities.
The plan will be outlined in an autumn white paper accompanying John Healey’s budget, with details on how local leaders can access more revenue raised in their communities.
Prime Minister and supporters frame the reform as empowering local leaders to fund transport, housing, and jobs, while ensuring the national tax rate itself remains unchanged.
Public debate centers on whether devolution should be universal or tied to mayoral structures, and how non-metropolitan areas would benefit without similar governance.
A political mix among mayors—with ten Labour-led, two Conservative, and two Reform—highlights challenges for uniform implementation.
Critics say the plan is vague and could widen regional disparities, while Labour and local leaders see it as transformative for growth and reduced reliance on central handouts.
The policy focuses on England, with the government seeking to work with Scotland, Wales, and Northern Ireland to mirror outcomes, though devolution remains uneven.
Coverage notes broader political context, including party reintegration debates and discussions about funding distribution and impacts on weaker local economies.
Reform advocates stress growth and investment over rebates, aiming to raise regional prosperity by investing local revenues rather than pushing for immediate tax rebates.
Local control would extend to housing, transport, and skills, including bringing rail and bus services under local control and accelerating tram or metro projects.
A No. 10 Manchester meeting framed a united national approach where localities drive growth, with Burnham advocating cohesive efforts to support places most in need.
Regions with upcoming mayoral contests, such as Greater Essex, Hampshire and the Solent, are examples of areas considering mayoral powers as part of the reform.
Summary based on 8 sources
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Sources

The Guardian • Jul 31, 2026
Andy Burnham to set out devolution plan amid criticism it won’t benefit regions equally – UK politics live
The Independent • Jul 31, 2026
What Andy Burnham’s new tax sharing plans could mean for your region
The Independent • Jul 30, 2026
Mayors allowed to keep share of taxes collected in their area as part of Burnham’s devolution revolution
Daily Mirror • Jul 30, 2026
Mayors to keep slice of income tax and business rates for local projects in devolution revolution