Devolution: Burnham’s Big Bet -

Andy Burnham became Britain’s prime minister yesterday, and he had already told us what his government would be built around. In his first major speech since launching his leadership bid, he promised the biggest rebalancing of power the country has seen, moving decisions out of Whitehall and into the regions. It is a compelling story, built on a decade of experience running Greater Manchester, and one many people across the country will want to believe. Whether moving power actually closes the gap it is meant to close is a separate question, and the evidence on what drives regional growth suggests a more complicated answer than the one Burnham is offering.

A decade of devolution deals, and the case Burnham is building on

To understand why devolution has become the organising idea of Burnham’s platform, it helps to look at what has actually happened in Greater Manchester over the past ten years, because it is the closest thing Britain has to a live experiment. Since 2015, Greater Manchester has accumulated an unusually wide set of devolved powers, covering transport, skills funding, health and social care integration, and housing, culminating in what is known as an Integrated Settlement, a single consolidated funding pot that gives the combined authority more discretion over how money is spent rather than forcing it through multiple separate government grant streams.

Reflecting on that decade, Burnham has argued that a place-first approach to governance offers a route to a more streamlined and financially sustainable state in a way that Whitehall, structured around departments rather than places, is not well designed to provide. He has also been candid about the friction involved, describing years spent re-making the case for devolution to a Whitehall that included ministers who blocked parts of agreed deals and departments that simply declined to engage.

The pitch Burnham is now taking to the public scales this experience up. His Manchester speech set out plans covering economic growth, public housing, industrial policy and education, all built around what he has called Manchesterism.

Reaction has been mixed. Even sympathetic observers have noted that his framing was aimed squarely at the English regions, leaving Scotland, Wales and Northern Ireland treated largely as an afterthought, and he has committed only in general terms to extending devolution there without offering detail on how. What unites the whole platform, though, is a working assumption that where power sits is the decisive variable, and that fixing the geography of British government fixes the geography of British growth.

Why the productivity gap is not primarily a Whitehall problem

That assumption deserves scrutiny, because the evidence on what actually drives regional productivity gaps points to a set of structural forces that exist largely independently of who holds administrative control. Economies grow unevenly across regions for reasons that include the depth and relevance of local skills provision, the quality of transport links between where people live and where the most productive jobs are, the willingness of businesses to invest in plant, equipment and training, and what economists call agglomeration effects, the tendency for productivity to rise when firms and skilled workers cluster densely together, which is part of why a small number of major cities pull disproportionately ahead.

None of these forces are primarily a function of whether a transport budget or a skills grant is signed off in Whitehall or in a town hall. A region can gain full control over its own transport spending and still struggle if the underlying workforce lacks the specific skills local employers need, or if the businesses that would otherwise invest choose not to because the customer base and supply chains around them are too thin.

The OECD’s newly published Economic Survey of the United Kingdom, launched on 15 July with a dedicated chapter on regional productivity. The Survey projects that UK growth will slow to 0.9% in 2026, down from 1.4% the year before, and identifies weak productivity growth and large regional disparities as persistent structural drags on the economy. Crucially, its own framing of the solution is not that decision-making needs to move closer to the regions, but it requires a comprehensive policy approach rather than a single structural fix.

Read carefully, this is closer to an argument against treating devolution as a sufficient answer than an argument for it. The OECD’s own diagnosis rests on skills, investment and the performance of lagging regions, not on the location of administrative authority. That means moving power out of Whitehall addresses, at best, one input among several, and quite possibly not the one doing the most work in explaining the gap in the first place.

What devolution would need to deliver on its promise

None of this means devolution is pointless, but it does mean the case for it has to rest on something more specific than the belief that centralisation itself is the primary obstacle. Research examining Burnham’s platform against the existing evidence base has raised two separate concerns that go beyond the question of where powers formally sit. The first is about incentives once power is devolved. Analysis of central-local relations under the current government has suggested that even generous devolution settlements can still end up channelling resources toward the areas expected to deliver the fastest measurable economic return. This would just replicate the same logic that currently concentrates growth in London and the South East, simply with different local actors making the allocation decisions. If that pattern holds, devolving power does not automatically spread opportunity more evenly. It can just move the point at which the same trade-offs get made.

The second concern is about accountability. Research into democratic oversight of combined authorities has found that public awareness of what metro mayors actually control remains low, that scrutiny capacity within combined authorities is limited, and that there is currently no formal mechanism for residents to participate directly in the strategic economic decisions made on their behalf.

If Burnham’s vision concentrates significant new powers in mayoral combined authorities and a No 10 North operation without addressing this gap, the practical effect could be a transfer of power from one distant, poorly scrutinised institution to another. It may be better geographically positioned but no more visible or answerable to the people it is meant to serve.

This is a key reason to treat the accountability architecture around devolution as being just as important as the transfer of powers itself. Burnham’s platform, at least for now, has said far more about what should move than about how anyone would know if it had actually worked.

A rebalancing of power, or a rebalancing of outcomes

The distinction that ultimately matters here is between moving power and closing the gap it is meant to close, and those are not automatically the same achievement. Burnham’s argument is built on lived experience in Greater Manchester and a well-documented frustration with a Whitehall that has often slowed or blocked agreed devolution deals. But the OECD’s own diagnosis of Britain’s regional productivity problem points toward skills, investment and the specific conditions in lagging regions as the decisive variables, with the location of decision-making as one factor among several rather than the central lever.

A more searching question for the coming months is not whether power moves out of Whitehall. It’s whether the places receiving it have the mechanisms to convert that authority into measurably different outcomes, or whether the same national patterns simply reassemble themselves at a regional scale under new management.

💼 Unpacked

Devolution – The transfer of powers and funding decisions from central government to regional or local bodies, such as combined authorities led by directly elected mayors, covering areas like transport, housing and skills.

Agglomeration effects – The economic benefit that arises when firms, skilled workers and infrastructure cluster densely in one place, raising productivity for everyone nearby. It is a major reason large cities tend to out-perform surrounding regions.

Integrated Settlement – A single, consolidated funding arrangement that gives a combined authority discretion over how it spends money across policy areas, rather than requiring separate applications for individual government grant streams.

OECD Economic Survey – A periodic, in-depth assessment the OECD produces for member countries, evaluating economic performance and offering detailed policy recommendations, often including special chapters on specific structural issues such as regional disparities.

📣 Support The Fiscal Compass

If you found this insightful, consider sharing with friends or colleagues. For weekly economics-led takes on markets, policy, and macro trends, subscribe to The Fiscal Compass.

Follow along on social media for concise updates throughout the week:

Instagram: @thefiscalcompassofficial

X: @FiscalCompass.

LinkedIn: Vinay Meisuria