England devolution plan gives mayors income tax share

If you read this quickly, it sounds like a tax tweak. In the GOV.UK press release published on 30 July 2026, the government presents it as something much bigger: Prime Minister Andy Burnham says English mayors will get a share of income tax revenue for the first time, alongside a greater share of business rates from next spring. (gov.uk) For you as a reader, the easier question is this: who gets to decide what your area needs, and who gets to spend the money when the local economy grows? That is the real argument sitting underneath the headline. (gov.uk)

**What devolution means here:** Westminster is not disappearing, and England is not getting a new national parliament. Instead, some powers now held in Whitehall would move to regional mayors and strategic authorities, so more decisions about transport, housing, skills and jobs are made closer to where people live. (gov.uk) The Institute for Government notes that English devolution has expanded through mayoral deals since 2014. In its June 2024 explainer, it said devolution then covered 48% of England’s population and that the most extensive powers tended to go to areas that accepted mayoral leadership. The government says places without a mayor will still be helped to build strategic authorities and gain more local control. (instituteforgovernment.org.uk)

Money is the part that makes this announcement more than a slogan. The Institute for Government says English local authorities are funded through a mix of central grants, council tax and business rates, and that grant funding fell sharply during the 2010s before rising again later. In 2024/25, it says 45.6% of local authority funding came from council tax, 22.3% from retained business rates and 32.1% from central government grants. (instituteforgovernment.org.uk) **What this means:** the government wants mayoral areas to rely less on annual Whitehall grants and more on revenue linked to local growth. The policy paper on the 2026 to 2027 finance settlement confirms business rates already have central and local shares, and the new press release says mayors will keep more locally generated revenue from next spring, with the Budget set to explain the income tax roadmap. (gov.uk)

The government says extra funding power will come with extra control over services that people notice straight away. According to the GOV.UK release, mayors would have more say over rail and bus services, major local transport schemes, planning and regeneration, 16 to 19 funding, and employment support, with Whitehall resources expected to follow devolved powers. (gov.uk) That matters because devolution only feels real when it changes daily routines. Better ticketing, faster decisions on stalled building sites, and training linked to local employers are all easier to picture than constitutional language. A separate Downing Street release in June said ministers were already pushing mayors to use new planning powers and a Right to Request process for more devolved responsibilities. (gov.uk)

To make the case, ministers point to places where devolved power has already produced visible changes. The July press release highlights West Yorkshire’s housing investment fund of up to £334 million, Liverpool City Region’s Tap and Go travel system and planned bus control later in 2026, and North East support for 65,000 residents to gain qualifications. (gov.uk) This is where the story becomes useful for readers, not just politicians. **What it means for accountability:** if mayors keep more tax raised locally, they will also find it harder to blame Westminster for everything. Voters should be able to ask clearer questions about bus reliability, homes, college places and jobs, because more of the decisions and more of the money would sit closer to home. (gov.uk)

The government says it wants to end what it describes as a Whitehall-first culture, using a local-first principle that forces ministers to explain why powers should stay in the centre. It also says the Civil Service should become smaller and more strategic as responsibilities move outward. (gov.uk) There is still a lot we do not know, and that is worth saying plainly. The Institute for Government wrote after the 2025 Budget that longer-term funding for mayors was important, but that local leaders would want detail on how new freedoms would work in practice and what happens to places without devolution deals. So the autumn Budget roadmap is the test: if it sets out clear rules, fair safeguards and lasting funding, this could change how England is governed; if it does not, the announcement risks sounding bigger than the machinery behind it. (instituteforgovernment.org.uk)