𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Chancellor Rachel Reeves announced this week that the Treasury is looking into ways to hand England’s metro mayors a share of national tax revenues, starting with income tax, alongside £2.3billion in new City Investment Funds, billed as a bold new answer to regional inequality. She said this fiscal devolution would be a permanent transfer of power, not just another gesture from Westminster. That all sounds very grand. But in practice, it looks much more like Westminster trying to pass the buck for Britain’s economic failures to regional politicians, while pretending this is some great democratic renewal.

The basic pitch is that if mayors get more control over money, they will be better able to drive local growth. But this rests on a fantasy that Britain’s problem is simply that too much power sits in London. It’s not. Britain’s problem is that it has become absurdly slow and bureaucratic when it comes to doing almost anything productive. Giving a larger pot of money to local strongmen doesn’t solve that. It just spreads the dysfunction around.

Northern mayors, naturally, are delighted. They always are when more public money is heading in their direction. The question isn’t whether Steve Rotheram or Andy Burnham can deliver a nice quote about local ambition. The question is whether this model has actually shown that devolved authorities use public money better, build faster, govern more cleanly or deliver more serious economic change. If they do, we have yet to see any evidence.

Just look at local government more broadly. Councils are already entrusted with huge responsibilities, and most have proved hopeless at managing them. Several major local authorities have effectively gone bust in recent years.

Birmingham’s financial collapse is the most glaring example, but it’s hardly the only one. So, when Reeves talks about fiscal devolution as though this is obviously the next step in a mature and competent system, forgive the rest of us for being slightly underwhelmed. The state of local governance in Britain doesn’t exactly inspire confidence.

And then there is Greater Manchester, often held up as the great success story of devolution. Even there, things are hardly spotless. The Greater Manchester Housing Investment Loans Fund was praised as successful in some respects, but an independent report showed an extraordinary concentration of loans flowing to one developer, Renaker, which received around £600 million of the £983million lent between 2015 and 2024.

Most of the homes built with that backing were not affordable housing. The report only emerged publicly after pressure from journalists. So no, it is not unreasonable to ask whether devolved power always comes with the transparency and accountability its champions love to talk about.

The deeper point is that regional inequality in Britain is not mainly the result of Whitehall refusing to trust mayors enough. It is the result of a national system that makes development painfully difficult. Take high-speed rail. Parliamentary evidence on HS2 found that the expected construction cost per mile was up to nine times higher than for comparable high-speed lines in France. That is not because French mayors possess some sort of magical powers. It’s because Britain has built a system that drives up costs, encourages major projects to crawl along for years.

You see the same pattern in water. England hasn’t built a new large public water supply reservoir in more than 30 years, despite all the warnings about drought, population growth and pressure on supply. We talk endlessly about resilience and scarcity while failing to build the infrastructure to solve them. That is not a devolution problem. It is a national incapacity problem.

That’s why Reeves’s announcement feels so misplaced. Westminster isn’t inherently the obstacle to regional revival. In many ways it is still the best vehicle for it, because only central government has the scale, authority, reach and legitimacy to push through the infrastructure, planning reform and national investment strategy that serious regional change requires.

The problem isn’t that Westminster has too much power. It is that the people running it keep using that power badly and are not accountable for their incompetence.

So no, Britain doesn’t need another layer of politicians with a new claim on taxpayers’ money and a fresh excuse when things go wrong. It needs a government willing to make building cheaper and faster, and willing to take responsibility for doing so. Until that changes, the government would be better off sending container loads of taxpayer money out into the North Sea and watching it float away. The effect would be pretty much the same.