Andy Burnham must act boldly, and early, to drive the regional growth agenda

Labour’s 2024 victory promised a “devolution revolution” to “kickstart economic growth”. The promise was stronger mayors, an ambitious investment plan, and an end to Whitehall's neglect of everywhere beyond the South East. But two budgets, one spending review and a parliamentary session later, growth remains historically weak with regional productivity gaps wider than between east and west Germany. In a new paper  ⁴ https://sites.harvard.edu/uk-regional-growth/interviews/ , we take stock of how the Starmer government performed on regional growth, and set out what his successor as prime minister might want to do differently. 

Over four years we interviewed 95 senior policymakers – including 10 former prime ministers and chancellors – about why British regional policy fails. The most consistent answer was: leaders didn’t act boldly enough, early enough. John Major, Tony Blair and George Osborne all regret not acting fast and decisively when they had the political capital and time; Osborne told us about the “screaming and kicking” he had to do to push devolution through a recalcitrant Whitehall. Without sustained pressure from the top, Whitehall inertia and political short-termism drive centralisation. That is why a strong start is essential.

The Starmer government has been better at creating institutions than using them

There are positives to take from the last two years. Unlike every government since the 1970s, the Starmer government did not tear up the regional architecture it inherited, breaking a pattern of chop-and-change. Instead, it opted to build on the cross-party supported mayoral model. Angela Rayner's MHCLG published an ambitious English Devolution White Paper at the end of 2024 (now largely enshrined in the English Devolution Act 2026), setting out a plan for mayors everywhere and a new legal category of Strategic Authority. Multi-billion pound integrated settlements, devised with the Treasury, have helped end the demeaning ritual of councils bidding for dozens of small pots, and the Fair Funding Review now matches money to need for around 85 per cent of councils, up from a third in 2024.

The mayors’ own successes at the same time have made a compelling case for change. Greater Manchester's economy is growing at roughly twice the national rate. The West Midlands is extending its metro; West Yorkshire is finally (we hope) building mass transit and the North-East is linking Newcastle and Sunderland by rail.

But we find that the government has proven better at creating institutions than using them. Starmer invited mayors into Downing Street on the third day of his premiership, but did little thereafter, and the central push to expand and empower mayors stalled especially after Angela Rayner left the government. The 'missions' architecture folded within 18 months and the Council of Nations and Regions has been dismissed by those who attend as “a glorified talking shop”. Departments holding the key growth levers – skills, innovation, employment support – declined to devolve even when mayors formally asked. Most significantly, two years in, there is still no national growth plan or clear vision for growth in the regions: no shared diagnosis of the causes of economic stagnation, nor a strategy – binding Whitehall, mayors and first ministers –  to overcome them.

The government’s spending choices reveal another set of priorities. Capital budgets rose by £120bn, the highest sustained public investment since the 1950s; but the vast majority of that rise went on defence or public services such as the NHS; while the NHS also absorbed roughly 90 per cent of the rise in current spending. Science capital spend is flat per head; housing capital is falling; the new Local Growth Fund is 60 per cent smaller than its predecessor and 43 per cent smaller than the European funds before that. Even city-region transport, the genuine bright spot – almost tripled to £15.6bn over 2027–32 – remains around half what the National Infrastructure Commission says is needed. The Greater South East still receives around £500 more growth spending per person than the rest of the country.

The regional growth agenda needs to be driven by the prime minister

Can Andy Burnham change that? We hope so. Since the 1970s every advance on devolution has come from a committed chancellor or deputy prime minister – Michael Heseltine, John Prescott, Gordon Brown, Osborne, and Rayner. But could we be on the cusp of the push for change coming from both Number 10 and the Treasury? Burnham’s platform as a prominent mayor, his “No 10 in the North”, and a Treasury already developing a roadmap for fiscal devolution are promising signals – if, as our interviewees warned, the PM can keep the chancellor and cabinet behind him.

We recommend that the incoming prime minister should establish a prime minister-chaired Regional Growth Delivery Unit, run jointly by the Cabinet Office and Treasury, to force the pace in Whitehall. A UK Growth and Productivity Strategy between ministers, mayors and first ministers should be agreed by the Council of Nations and Regions by the year’s end to iron out inconsistencies in existing plans, and to sign-off a shared plan for action.

Words must be met with funding: the spring 2027 spending review should include a region-by-region investment plan, spending as much on transport, innovation and skills outside the ‘Golden Triangle’ as within it. The prime minister should also commit to "completing the map": with mayoral elections everywhere by 2029, even where the government's opponents will win; NHS and police borders aligned with mayoral boundaries; and power, money and people continuing to flow from Whitehall to Strategic Authorities. We need more 'doers' in the regions, and fewer 'checkers' in SW1.

For the first time, the mayoral settlement has survived a change of government; the test for the rest of this parliament is whether the new centre now gives it the powers, money and direction to match and can credibly make the argument that this strategy will boost regional growth and living standards over time – or whether national inertia once again outlasts local ambition.

“Regional Growth Two Years In: Is the government on track to boost UK growth by closing regional divides?”, is a Harvard and King’s College London publication.

Ed Balls is an Institute for Government board member