Prime Minister Andy Burnham said Thursday that English regional mayors will receive a share of income tax and business rates revenue [1].

The move represents a significant shift in how the United Kingdom distributes fiscal power, moving control from central government to regional leaders. By granting mayors direct access to tax streams, the administration aims to reduce reliance on Westminster and allow cities to fund local priorities more autonomously.

Burnham said the initiative is designed to empower regions and deliver "good growth in every postcode" [2]. The plan seeks to stimulate economic development by linking regional investment directly to the tax revenue generated within those specific areas [3].

"I'm proud to be standing in front of you today to announce that we will give mayors a share of income tax revenue," Burnham said [4].

While the Prime Minister confirmed the intent to share revenue, the specific percentages and mechanisms for distribution remain undecided. Full details of the devolution framework are scheduled to be released after the budget on Oct. 28, 2026 [5].

The proposal has already met with some internal skepticism regarding the technical implementation of tax adjustments. Rebecca Haigh, the Chancellor of the Duchy of Lancaster, expressed doubt about the feasibility of certain mechanisms associated with the plan. Haigh said, "I'm not convinced it would be possible to set up a rebate scheme" [6].

This announcement follows earlier pledges made in June to prioritize regional growth as a core pillar of the government's domestic agenda [7]. The administration intends for these financial powers to provide mayors with the tools necessary to tackle regional inequality, and infrastructure deficits across England [8].

“Good growth in every postcode.”

This policy shift signals a move toward fiscal federalism in England, where regional mayors gain a level of financial independence previously reserved for the central government. If implemented successfully, it could create a more competitive environment between English cities, though the lack of a clear rebate mechanism suggests potential friction in how tax burdens are balanced across different regions.