UK devolution model hinges on collaboration and local investment

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UK devolution and collaboration

Highlights

Fewer than 10,000 staff work in English mayoral combined authorities, with budgets totalling under £10 billion—only 0.3 per cent of UK GDP.
Proposed reforms would redirect 10 per cent of the over £100 billion UK public financial institution funds, giving each MCA a £1 billion endowment and £10 million annually for staff development.
The article asserts that regional collaboration and connected city clusters, supported by institutional reforms and improved transport, now offer greater growth potential than single-city models.

Devolution strategy and funding proposals

As reported by the Financial Times, Burnham’s case for reform centres not only on transferring powers from central government to local authorities but also on building a more collaborative model of governance. The argument is that the UK’s highly centralised system struggles to coordinate policy across departments and stakeholders, while local structures are better placed to align public, private and civil society efforts around shared economic goals.

The article points to Greater Manchester as an example of how a locally defined growth strategy can bring together government, businesses, education providers, civic groups and investors. In that framing, devolution is presented less as an end in itself and more as the structure that allows effective coordination within places and between regions.

It also outlines capacity constraints that could limit the model’s success. Fewer than 10,000 people work in English mayoral combined authorities, compared with a civil service of more than 500,000, while the combined budget of the MCAs is less than £10 billion, or about 0.3 per cent of UK GDP.

To address those gaps, the proposal suggests redirecting part of the more than £100 billion already committed to the UK’s public financial institutions, including Homes England, the National Wealth Fund and the British Business Bank. Top-slicing 10 per cent of that capital would give each MCA a £1 billion endowment to support a Good Growth Fund, while a further 1 per cent could provide £10 million a year for a decade to strengthen local staffing and expertise.

Regional growth implications for the UK economy

The broader economic case is that collaboration within regions and across them is now more important than reliance on single large cities. The argument holds that, while supercities drove growth in the 20th century, connected clusters of cities, or super-regions, are becoming the stronger model in the 21st century.

In that context, the UK’s compact geography is presented as an advantage if cities and regions cooperate more closely and improve transport links. Cross-regional initiatives are already emerging, but the article argues that they need greater scale and stronger institutional backing to generate national growth benefits.

The proposal also suggests a change in career incentives within the state, with larger secondment programmes and staff swaps from the civil service into local institutions. Supporters of the model argue that, if local government is adequately resourced, devolved and plural governance stands a better chance of delivering economic renewal than the centralised system it is meant to replace.

Our earlier article reviewed a set of UK-linked stock picks across consulting, travel and retail, focusing on BTG Consulting, Jet2 and Currys as they navigate higher costs and uneven demand. We highlighted how earnings resilience and balance-sheet strength are shaping investor preference, with BTG and Currys backed for growth and cash returns, while Jet2 was viewed as solid but more fairly valued after its latest results and buyback move.

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