# Can Andy Burnham’s Devolution Plan Deliver Real Economic Growth?
Andy Burnham’s calls for deeper devolution have reignited debate about whether shifting powers away from Westminster to local leaders can meaningfully boost regional economies. BBC Verify recently examined the potential effects of expanding devolution across the UK, and the findings highlight both possibilities and limits. This post takes a practical look at how further devolution — of the sort Burnham advocates — could influence economic performance, what mechanisms would drive change, the evidence so far, potential pitfalls, and what would be required to turn greater local control into sustained growth.
## What exactly is being proposed?
When politicians like Andy Burnham press for more devolution, they typically seek a package of extra powers and resources for city-regions and combined authorities. While different proposals vary, common elements include:
– Greater control over transport planning and funding (integrated ticketing, infrastructure investment).
– Responsibility for skills, adult education, and employment programmes tailored to local labour markets.
– Expanded planning and housing powers to accelerate development and densification.
– Authority over certain health and social care budgets and services to improve integration.
– Enhanced powers to deliver business support, innovation hubs, and place-based industrial strategy.
– More control over locally raised revenues (e.g., business rates retention, stamp duty adjustments) or the ability to levy limited taxes.
Burnham’s vision, in practice, centres on equipping Greater Manchester — and by extension other city-regions — with the tools to design policies that fit local conditions rather than relying on one-size-fits-all national programmes. But the economic impact depends heavily on which levers are devolved and how much funding and freedom accompany them.
## How devolution can, in theory, raise economic growth
Devolving powers to local leaders can affect growth through several channels:
– Tailored policy design: Local governments know their industries, skills gaps and transport bottlenecks better than central government. Policies matched to local conditions can be more effective at boosting productivity and employment.
– Faster decision-making: Shorter chains of command and fewer national constraints can reduce delay in approving infrastructure, housing developments and business support programmes.
– Better integration of services: Combining transport, skills and business support under one roof enables joined-up solutions — for example, training programmes aligned to new transport-linked enterprise zones.
– Place-based investment: Local leaders can prioritise projects that enhance agglomeration economies (e.g., clustering of related firms), raising productivity through knowledge spillovers and shared inputs.
– Improved accountability and responsiveness: Mayors are electorally accountable to residents and businesses in their area, providing incentives to deliver tangible improvements.
– Leveraging local assets: Regions with universities, ports, airports or advanced manufacturing capacity can coordinate investment across sectors to exploit comparative advantages.
These mechanisms suggest devolution can be a useful tool for strengthening regional economies — particularly in large metropolitan areas with sufficient scale and institutional capacity.
## What the evidence so far tells us
Empirical evidence from the UK and internationally is mixed but instructive.
– UK city-region experiments: Some English city-regions, including Greater Manchester, have gained new powers over transport and skills. These changes have improved coordination and allowed for localized initiatives (e.g., transport fares reform, integrated care pilots). However, measurable impacts on productivity and GDP per head have been modest so far, partly because most devolution deals have not included significant fiscal powers or long-term capital transfers.
– Health and social care integration: Greater Manchester’s health devolution pilot showed that local integration can improve service delivery and patient outcomes. While these changes can indirectly support the economy (through labor market participation and reduced sickness absence), the direct effect on growth is nuanced.
– International examples: Regions in federal countries like Germany or the United States that retain strong fiscal autonomy often show greater capacity to pursue tailored industrial strategies and long-term investment. Conversely, countries with very centralised systems tend to be slower to adapt to local economic shifts. That said, outcomes depend on governance quality, institutional capacity, and the availability of resources.
In short, devolved powers can enable better-targeted interventions, but the size and durability of their contribution to GDP growth depend on the nature of the powers devolved, funding, and local governance capability.
## Constraints that limit impact
Devolution is not a magic bullet. Several obstacles can blunt its potential to raise economic growth:
– Limited fiscal autonomy: If devolution only transfers responsibilities without meaningful revenue-raising authority or long-term capital, regions can be constrained by central funding cycles and austerity pressures.
– Capacity and expertise: Not all local authorities have the staffing, analytical, or programme-management capabilities to design and evaluate complex growth strategies.
– Fragmentation and coordination challenges: Economic activity crosses administrative borders. If powers are devolved on a patchwork basis, it can create new coordination problems, particularly where metro areas span multiple authorities.
– Short political horizons: Local leaders often face the same electoral pressures as national politicians. Without mechanisms to lock in long-term investments, projects may get reprioritised with changing administrations.
– Risk of widening inequalities: More powerful and prosperous city-regions may accelerate growth locally while leaving smaller towns and rural areas behind, increasing regional disparities unless redistribution or complementary national policies are used.
– Regulatory and national barriers: Some levers for productivity — skills accreditation systems, migration policy, certain taxes — remain national. Without reform at that level, local powers have limited reach.
## Which powers matter most for growth?
Not all devolved powers are equally likely to move the dial on growth. The most impactful tend to be those that:
– Unlock large-scale investment: Control over planning and development plus capital budgets can accelerate housing and infrastructure projects that support labour market mobility and firm expansion.
– Align skills with employer demand: Devolving adult education and employment services allows for rapid redesign of training to match local industry needs, improving labour-market attachment and productivity.
– Improve transport integration: Better local control of transport networks can shorten commutes, expand the effective labour pool, and reduce congestion costs.
– Support innovation ecosystems: Funding and convening power to back innovation hubs, incubators and university-industry partnerships can spur productivity in knowledge-intensive sectors.
– Enable strategic procurement: Using public procurement to favour local suppliers and drive innovation can stimulate local firms and supply chains.
Conversely, symbolic powers without budgets or regulatory flexibility are unlikely to produce substantial economic returns.
## Metrics to watch if devolution is implemented
To judge whether devolution is boosting growth, monitor indicators such as:
– Productivity (output per worker) and GVA per capita.
– Employment rates and labour-force participation, especially for underrepresented groups.
– Private sector investment — both overall and in strategic sectors.
– Wage growth and income distribution.
– Business formation and survival rates, particularly for high-growth firms.
– Housing starts, planning approvals and changes in housing affordability.
– Commute times and public transport usage.
– Skills attainment and apprenticeship uptake linked to local industries.
Short-term improvements in planning approvals or skills programme enrolment are promising, but sustainable economic growth should translate into higher productivity, investment and living standards over several years.
## How national government can complement devolution
Even if local areas receive more powers, central government plays a crucial role:
– Provide predictable, multi-year funding for capital projects to reduce stop-start investment cycles.
– Reform national frameworks that limit local action (e.g., skills qualification standards, labour and migration policy).
– Ensure mechanisms for fiscal equalisation or targeted support to prevent deepening regional inequalities.
– Support capacity-building initiatives to strengthen local institutions’ planning, procurement and evaluation skills.
– Facilitate cross-boundary cooperation for functional economic areas that span multiple local authorities.
Devolution works best when central and local government coordinate, with clear responsibilities and stable long-term funding.
## Short-term vs long-term expectations
Realistically, the economic gains from devolution tend to follow a pattern:
– Short-term (0–2 years): Limited, incremental changes such as restructured services, pilot projects, and administrative efficiencies. Noticeable effects on headline productivity metrics are unlikely.
– Medium-term (3–7 years): As integrated transport, housing and skills initiatives scale up, you may see improvements in employment, labour matching, and investment attractiveness.
– Long-term (7+ years): If powers are coupled with fiscal autonomy and consistent investment, place-based industrial strategies and upgraded infrastructure can drive meaningful gains in productivity and GDP per head.
Patience and consistent policy are essential. Devolution is a long-game strategy rather than a quick fix.
## Potential unintended consequences
Policymakers should be aware of possible downsides:
– Competitive bidding among regions for investment can lead to a race-to-the-bottom in incentives.
– Localised tax variation could distort business location decisions and complicate national policy.
– Fragmented policy landscapes may increase complexity for firms operating across regions.
– Political tensions may arise if perceived winners and losers diverge sharply between areas.
Mitigating these risks requires mechanisms for coordination, transparency and evaluation.
## What would make Burnham’s plan more likely to succeed?
For Andy Burnham’s devolution push to materially increase economic growth, the following elements would strengthen the case:
– Real fiscal powers: Some revenue-raising capacity or stable, multi-year funding tied to long-term priorities.
– Capacity investment: Training, data systems and technical support for local teams to design and deliver sophisticated programmes.
– Strategic planning powers: Stronger control over land-use, housing and major infrastructure decision-making.
– Institutional continuity: Cross-party and statutory commitments to maintain long-term projects beyond electoral cycles.
– Clear evaluation frameworks: Metrics and independent evaluation to measure progress and adapt policies based on evidence.
– National enabling policies: Changes at the national level (skills, immigration, research funding) to enlarge the scope for local impact.
Without these, devolution risks delivering modest administrative improvements but limited macroeconomic uplift.
## Final assessment: will devolution raise economic growth?
Devolution holds genuine potential to improve economic outcomes by allowing policy to be tailored to local realities, speeding up decisions, and integrating services. However, the scale of its effect depends heavily on the depth of powers transferred, the funding available, and the ability of local institutions to implement and sustain strategic investments.
If Burnham’s plan merely reallocates responsibilities without granting meaningful fiscal autonomy, long-term capital and capacity building, the boost to GDP and productivity is likely to be limited. Conversely, if devolution includes substantive revenue powers, multi-year funding, and strengthened local capability — and is coordinated with enabling national reforms — then it could unlock meaningful growth over the medium to long term.
Conclusion
Andy Burnham’s devolution agenda offers a credible path to more responsive and locally tailored economic policy, but it is not a guaranteed engine of growth by itself. To translate greater local control into sustained increases in productivity, investment and living standards, devolved powers must be accompanied by real fiscal capacity, stable funding, institutional capacity-building and national policy adjustments. Done well, devolution can be a powerful lever for regional prosperity; done poorly, it risks producing administrative change with only modest economic returns. The difference will be in the substance of the powers handed down and the long-term commitment to using them strategically.