Prime Minister Andy Burnham intends to devolve taxation powers to local authorities in England to address regional inequality and cost-of-living pressures.

This shift in fiscal policy represents a fundamental change in how the United Kingdom manages its economy. By moving tax-raising powers away from the central government, the administration aims to grant local leaders more autonomy to respond to the specific economic needs of their constituents.

During a Sky News interview on July 31, Burnham said the government needs to give power back to local communities and let them raise and spend their own taxes. This strategy is intended to reduce the disparities in economic growth between different regions of England.

Beyond taxation, the Prime Minister is introducing a plan focused on youth who are Not in Education, Employment, or Training (NEET). This initiative seeks to reintegrate young people into the workforce and education system to strengthen long-term economic stability.

These proposals serve as a precursor to the upcoming autumn Budget, which Chancellor John Healey is scheduled to deliver later in 2026 [1]. The Budget is expected to further outline the government's approach to the cost-of-living crisis.

Critics have reacted with skepticism toward the Prime Minister's financial strategy. The Daily Express reported that the announcement will lead to higher taxes. Matthew Lynn of MoneyWeek described the policies as financial trickery, saying that if Burnham were the head of a listed company, his actions would have sparked a share-price slide.

Conversely, other reports suggest the plan is a constructive way to manage the economy. Some analysts argue that devolving taxation could provide local authorities with necessary control, without necessarily increasing the overall tax burden on citizens.

“"We need to give power back to local communities and let them raise and spend their own taxes."”

The proposal signals a move toward a more decentralized UK economy, mirroring some of the devolution already present in Scotland. If implemented, it shifts the political risk of tax increases from the central government to local leaders, while potentially creating a more fragmented fiscal landscape across England.