# Will Andy Burnham’s Devolution Plan Boost Economic Growth in Greater Manchester and Beyond?
Andy Burnham, the mayor of Greater Manchester, has long pushed for a broader transfer of powers from Westminster to city-regions. Advocates argue that devolving decision-making brings policy closer to local needs and can unlock economic potential. Skeptics warn that without fiscal muscle and strong institutions, extra powers may have only a limited impact. So what can realistically be expected if Burnham’s proposals—or similar devolution deals—were implemented at scale? This post examines the mechanisms through which devolution can influence growth, looks at empirical evidence, outlines constraints and risks, and suggests what success would need to look like in practice.
## What does “devolution” mean in this context?
Devolution refers to transferring responsibilities, funding, and sometimes taxation powers from central government to regional or local authorities. In the UK, devolution has taken many forms: Scotland and Wales have parliamentary powers, London has extensive powers and a mayoral budget, and Combined Authorities (like Greater Manchester) have negotiated specific bundles of responsibilities—transport, housing, skills, and some employment programs. Burnham’s proposals typically aim for expanded powers that would allow Greater Manchester to plan and fund long-term initiatives more autonomously, similar in some respects to the arrangements London enjoys.
## How could devolution drive economic growth?
The theory linking devolution to growth rests on a few core mechanisms:
– Local tailoring of policy: Regions can design interventions that match local economic structures—sector strengths, commuting patterns, skills gaps—and avoid a one-size-fits-all approach from central government.
– Faster decision-making and longer-term planning: Local leaders can prioritize infrastructure, housing and skills over electoral cycles that dominate national politics, enabling strategic investments.
– Better coordination of transport, planning and housing: Integrated powers over land use and public transport can increase economic density and reduce commuting frictions, supporting agglomeration economies.
– Targeted skills and employment initiatives: With control over adult skills funding or bespoke training programs, localities can shape workforce development around employer needs.
– Place-based investment and business support: Devolved funds can back local innovation clusters, incubation networks and sector strategies that suit regional comparative advantages.
– Leveraging local finance and private capital: Devolved authorities can use borrowing, land value capture, and partnerships to raise funds for capital projects.
These pathways can, in principle, raise productivity, employment and living standards. But the magnitude of the effect depends heavily on the size of the powers, funding arrangements, and institutional capacity.
## What does the evidence say?
Empirical evidence on the economic impact of devolution in the UK is mixed and context-dependent:
– London: The decades-long growth of London has coincided with devolutionary arrangements and sustained investment in transport, housing and skills. But London’s global position, scale, and pre-existing capital mean it is an imperfect comparator for other city-regions.
– City-regions: Studies of Combined Authorities show incremental gains when powers include transport integration and investment. For example, integrated transport projects often improve connectivity and labor market access, which can boost employment and productivity over time.
– International examples: Cities with meaningful fiscal autonomy (e.g., some German Länder or Scandinavian cities) have tended to implement more coherent local industrial strategies and infrastructure planning, supporting sustained growth. But success relies on accountability, technical capacity, and balanced funding.
– Limits: Where devolution is limited to administrative functions without corresponding fiscal powers or capital, the growth effects are small. Fragmentation, lack of coordination with national policy and insufficient scale of investment blunt the potential upside.
In short, devolution can be an enabler of growth, but it is neither a guaranteed shortcut nor a panacea. The devil is in the detail.
## Key constraints that could limit impact
1. Funding and fiscal autonomy
– Many local authorities operate within tight budgets set by central government. Without the ability to raise or retain significant tax revenues, local leaders have limited ability to scale up transformative investments.
– Short-term grant cycles and ring-fenced funding undermine long-term strategy.
2. Institutional capacity
– Delivering complex infrastructure, skills programs and economic development requires skilled corporations and civil service capacity at the local level. Not every region has the administrative capability to execute ambitious plans quickly.
3. Scale and spillovers
– Economic activity often crosses administrative boundaries. If powers are devolved to many small authorities without coordination, positive spillovers (e.g., commuter flows, housing markets) may be poorly managed.
4. Market failures and national-level levers
– Some levers for productivity—research and development funding, trade policy, macroeconomic settings—remain national. Local action may be constrained by national-level policies and global economic conditions.
5. Inequality and uneven growth
– Devolution risks widening disparities if wealthier regions can leverage local tax bases to invest while poorer areas cannot. Without redistribution mechanisms, regional inequality may increase.
## What specific powers would matter most for growth?
If the goal is to materially raise economic growth in Greater Manchester (and elsewhere), certain powers are more consequential than others:
– Control over transport budgets and planning: Ability to prioritize local public transport, active travel and strategic road links improves connectivity and access to jobs.
– Strategic planning and housing powers: Influence over land use and the ability to capture land value can speed up housing delivery, reduce commuting costs and support labor mobility.
– Adult skills and employment programmes: Flexibility to tailor training to employer needs and local sector strategies improves job matches and raises productivity.
– Capital investment and borrowing capacity: Permission to borrow for long-term investment backed by predictable revenue streams unlocks large-scale infrastructure projects.
– Tax devolution: Some scope to raise or vary business rates, or to retain a higher share of certain taxes, gives local leaders skin in the game and funding for priorities.
– Business support and innovation funding: Local control over innovation investment and cluster building can attract high-value firms and keep talent.
The combination matters: powers in isolation produce smaller effects than a coherent package that lets local leaders plan, finance and deliver an integrated strategy.
## Could Greater Manchester replicate London’s success?
Greater Manchester has several advantages: a diversified economy, a large population, established institutions, and a mayoral governance model already in place. But there are important differences:
– Scale and global role: London benefits from unique agglomeration effects as a global financial and cultural centre; no other UK city easily mirrors that position.
– Fiscal base: London’s tax base generates significant revenue to invest in public goods—something most regions do not have.
– National policy levers: Some growth drivers (e.g., foreign direct investment, national R&D spending) still depend on central government action.
Realistic expectations: Greater Manchester could capture more growth by improving transport connectivity, accelerating housing delivery and strengthening skills pipelines. But matching London’s growth trajectory is unlikely without very large, systemic changes to fiscal policy and national investment patterns.
## Potential benefits beyond GDP
It’s also important to consider outcomes that do not show up immediately in headline GDP numbers but matter socially and economically:
– Improved access to public services and reduced commuting stress.
– More inclusive growth through targeted employment support.
– Faster responses to local crises (e.g., health, flood risk).
– Stronger civic engagement and accountability when decisions are made locally.
These benefits can indirectly support economic resilience and sustainable growth.
## Risks and how to mitigate them
– Risk: Increased inequality between regions.
– Mitigation: Maintain national redistribution mechanisms and targeted uplift funding for lagging areas.
– Risk: Fragmentation and duplication of policy.
– Mitigation: Establish regional coordination bodies and clear frameworks for cross-boundary projects.
– Risk: Short-termism or politicized spending.
– Mitigation: Multi-year funding settlements, transparent performance metrics and independent oversight.
– Risk: Limited financial capacity.
– Mitigation: Allow responsible borrowing tied to capital projects, and create revenue-sharing arrangements that reward growth while protecting lower-income regions.
## How to measure whether devolution is working
Policymakers should track a balanced set of indicators over the medium term (5–10 years):
– Productivity (GVA per worker or per hour)
– Employment and unemployment rates
– Wage growth and median incomes
– Private investment, especially in high-value sectors
– Housing affordability and delivery rates
– Commute times and public transport usage
– Skills attainment and employer satisfaction with training programs
– Inequality metrics across neighborhoods
Evaluations should compare outcomes with counterfactual scenarios and peer city-regions to isolate the impact of devolved powers.
## Practical steps to maximize the growth potential of devolution
1. Negotiate comprehensive packages of powers with multi-year guaranteed funding, not short-term pilot programs.
2. Prioritize integration of transport, planning and housing to unlock agglomeration benefits.
3. Build local institutional capacity—invest in planning teams, data analytics, and delivery functions.
4. Empower local areas with flexible skills funding tied to employer-led training pathways.
5. Create fiscal incentives that allow regions to benefit from growth while maintaining national solidarity.
6. Set transparent targets and independent evaluations to learn what works and scale successful interventions.
## Final assessment: will Burnham’s plan raise growth?
The short answer: possibly—but not automatically or uniformly. Devolution under Andy Burnham’s model can create the conditions for stronger local growth by aligning policy levers with local needs, speeding up investment decisions, and building locally tailored skills and housing strategies. However, the scale of economic uplift depends critically on whether devolved arrangements include meaningful fiscal capacity, sustained capital funding, and the institutional clout to coordinate cross-sector projects.
Without those elements, devolution risks becoming administrative reshuffling rather than a growth engine. With them, and with careful attention to mitigating regional disparities, devolved powers could deliver measurable improvements in productivity, employment and local living standards over the medium term.
Conclusion
Devolution offers a credible path to improve local economic outcomes by giving city-regions the tools to design and deliver place-based strategies. Andy Burnham’s push for broader powers recognizes that locally tailored solutions can address specific bottlenecks—transport congestion, housing shortages, skills mismatches—that hold back growth. But devolution is not a silver bullet. Its success hinges on robust fiscal arrangements, empowered institutions, and a thoughtful national framework that supports rather than undermines local ambition. If implemented with adequate resources, clear incentives, and rigorous evaluation, devolved governance could make a meaningful contribution to economic growth; without those safeguards, its impact is likely to be limited.