London, United Kingdom. Andy Burnham has pledged what he describes as the biggest rebalancing of power in Britain’s history, aiming to shift authority from central government to regional leaders to address persistent regional inequality.
The proposed reforms would give regional authorities greater control over spending, transport, housing, skills and economic growth, but face political and administrative challenges ahead of the next national election.
Centralisation and inequality
Britain is among the most centralised developed democracies in taxation and public spending, while also being among the most economically unequal. Economists and lawmakers have argued that the two issues are directly connected.
About 6% of tax revenue is raised below national government level, compared with 20% in France and roughly half in Germany and the United States, according to the Organisation for Economic Cooperation and Development.
Regional inequalities in Britain are larger than those between eastern and western Germany and between northern and southern Italy, two of Europe’s most economically unequal countries.
Political and practical challenges
Burnham’s plan is central to his political vision but is expected to face resistance within central government. The changes would be complex to implement, and benefits may take time to reach communities.
Burnham will have no more than three years before the next national election, with previous leaders having faced voter frustration after failing to deliver promised transformations.
“If you talk a good game, but don’t actually pass any of the power on, or it happens very slowly, people get impatient and get frustrated by it,” said Henri Murison, chief executive of the Northern Powerhouse Group, a lobby group representing business and civic leaders in northern England.
Local accountability
Supporters of greater devolution argue that regions with control over revenue have stronger incentives to attract businesses and expand their tax base.
However, experts say transferring budgets alone would not be sufficient. The reforms would also require new systems of local accountability and financial control in parts of England where such structures are weak or do not exist.
