Tory and Reform mayors plan to hand tax rebates to local residents under Andy Burnham’s devolution drive
The Prime Minister is set to announce plans giving mayors a share of income tax revenue and potentially devolving business rates as part of his devolution agenda. However, instead of using these powers for infrastructure investment, Tory and Reform UK mayors are planning to hand tax rebates to local residents, representing a significant divergence from the government's intended use of devolved powers to boost public services and investment.
Ben Houchen, the Tory mayor of Tees Valley, is planning to create a rebate scheme to return money to residents' pockets and is already discussing the structure with the Treasury. Reform UK mayors Luke Campbell (of Hull and East Yorkshire) and Andrea Jenkyns (of Greater Lincolnshire) are also exploring similar plans, each citing a desire to make their regions more competitive and reward local taxpayers. A government source expressed scepticism about whether mayors can deliver these rebates given budget pressures and past broken promises, though a think tank researcher pointed to the success of business rates devolution in Greater Manchester and the West Midlands as evidence that broader fiscal devolution could work.
In short
- Tory and Reform mayors plan tax rebates instead of infrastructure spending
- Sharp divergence from PM's intended devolution and public investment agenda
- Scepticism remains over whether budget constraints allow actual delivery
Explained simply
Devolution is the process of passing powers and control of public money from central government to local areas. The government is planning to devolve powers to local mayors, including a share of income tax revenue and possibly control over business rates, giving them more say over how money is spent locally.
Several mayors are now planning to use these powers differently than the government intended. Ben Houchen, the Conservative mayor of Tees Valley, is designing a scheme to return money directly to residents, whilst Reform UK mayors Luke Campbell (Hull and East Yorkshire) and Andrea Jenkyns (Greater Lincolnshire) are exploring similar rebate plans. They argue this will make their regions more competitive and reward local taxpayers.
This diverges from the government's original aim of using devolved money to improve public services and infrastructure. Government officials have expressed doubt about whether mayors can deliver on these promises, given budget pressures and past broken promises. However, supporters point to successful examples in Greater Manchester and the West Midlands where giving local control over money has worked.