The prime minister announced today that mayors will be allowed to keep a share of income tax and business rates revenues for the first time
At least part of the retained income tax is intended to be put towards mayoral construction funds, as Westminster moves more responsibility back to local powers in their devolution quest.
The funds are following models to boost transport, housebuilding, and skills training.
Better control and bespoke solutions for communities
Described as the biggest transfer of power from Westminster in a generation, these financial powers will encourage economic growth and tackle issues specific to communities. This allows mayors to put more towards public services, such as transport infrastructure, or housing and other issues that are affecting their area the most.
This will take effect from next spring with business rates and a roadmap will be released detailing how this and income tax retention will work.
The funds have been described as bringing power to:
- Bring rail and bus services under greater local control, helping introduce integrated ticketing and more reliable services.
- Build more homes where they’re needed and unlock stalled development sites by giving local leaders stronger planning and regeneration powers and more devolved funding.
- Give more control over large local transport schemes, trams and metros to mayors by removing and streamlining Whitehall.
- Give mayors control over 16-19 funding and employment support, so young people can train for the jobs local employers need and people out of work can get tailored support back into employment.
- Back local industries and innovative businesses, and attract investment, creating more well-paid jobs.
- Where power is devolved, Whitehall resource will follow, giving devolved leaders the resources they need to drive change closer to home
“The first step in our plan”
Prime minister Andy Burnham said: “I said we’d take power out of Westminster and carry it into every postcode in the country. Today, we make good on that promise.
“Under our plans, more of the taxes raised in a community will stay in that community. Soon, every local leader will have the power and resources to improve public transport, build homes and create jobs.
“I know what it’s like to be ignored by politicians in Westminster. I’m not going to make that same mistake now I’m PM.
“The whole of government will now pull together behind the people and places that desperately need our support. This is how we’ll bring back hope and bring power home to you.”
Secretary of state for housing, communities and local government Angela Rayner said: “This is the first step in our plan to rewire this country and build a better future, where power is no longer hoarded in Westminster but is put back in the hands of local people – where it belongs.
“Our devolution revolution is about bringing an end to the begging-bowl culture of the past, and instead making sure our local leaders have the tools they need to drive the change that communities have been crying out for.
“We need every region to be firing on all cylinders if we want good growth in every postcode, and we will do everything in our power to make that a reality.”
FAQ: Mayoral construction funds
What has been announced?
The prime minister announced that mayors will be allowed to keep a share of income tax and business rates revenues for the first time.
What is the link to mayoral construction funds?
At least part of the retained income tax is intended to be directed towards mayoral construction funds, alongside wider devolved funding aimed at local priorities.
What kinds of projects could this support?
The piece highlights models focused on boosting transport, housebuilding, and skills training, with mayors able to put more towards services such as transport infrastructure and housing.
How could local transport be affected?
The plans are described as enabling greater local control of rail and bus services, with the potential for integrated ticketing and more reliable services, and more control over major local schemes like trams and metros.
How could housing and development be affected?
The article says the measures aim to help build more homes where they’re needed and unlock stalled development sites by giving local leaders stronger planning and regeneration powers and more devolved funding.
What does this mean for training and employment support?
Mayors are described as gaining control over 16–19 funding and employment support to better align training with local employer needs and tailor support back into work.
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