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Devolution

Letter from Chancellor and Deputy Prime Minister to Mayor of Greater Manchester


Chancellor of the Exchequer, Rachel Reeves, and Deputy Prime Minister, Angela Rayner, have written the below letter to the Mayor of Greater Manchester, Andy Burnham, outlining how they will support Greater Manchester in achieving its full growth potential.

This comes after the publication of the English Devolution White Paper on Monday, December 16, setting out how other areas of the country will receive powers currently held by combined authorities such as the GMCA.

Read the full letter below:

Dear Mayor Burnham,

Greater Manchester has a strong track record on growth – with an economy which has grown by 50% since 2000 – and is the fastest growing economy in the UK. Your leadership has been key to that performance. But despite that progress, GM’s productivity is still 35% below that of London. Closing Greater Manchester’s productivity gap to London to those that Lyon and Toulouse have with Paris respectively would increase total GVA by around £13 billion a year. We will work with you to unlock further growth in Greater Manchester over the next few years, playing a significant role in delivering the national growth mission and milestone of higher living standards in every region of the UK.

Delivering that growth will mean removing the constraints on productivity which are already being felt in Greater Manchester. It will require investment in infrastructure to cope with the consequences of growth and to deliver on our shared ambition for a carbon neutral economy. We also need to tackle head on the challenge of worklessness and economic inactivity, through a person-centred approach. We know that one of the most significant constraints on the growth of Greater Manchester is the capacity of the public transport system. The development of the tram network and the franchising of the bus system, as part of the Bee Network, has made significant progress in improving mobility around the city region and increasing passenger numbers. But the limits of that success are already being reached.

That is why we have published a new, enhanced devolution framework as part of the English Devolution White Paper, setting out the powers which will be made available to Strategic Authorities such as GMCA. This is part of a broader movement from devolution by deal to devolution by default, by putting the responsibilities and powers of Mayors and Combined Authorities into law with a transparent process for accessing powers. We know you will be a champion for this, and welcome the substantive steps and commitments the Government is making already on devolution, including:

  • Implementing the integrated settlement for Greater Manchester, to start from 2025-26, and expanding it to cover new areas like supported employment for the inactive and Investment Zones.
  • A statutory role for Mayors in governing, managing, planning, and developing the rail network, with the right to request devolution of services, infrastructure and stations – something which we know is integral to delivering your ambitions for the Bee Network. We will also devolve the ability for Mayors like you to approve Lane Rental Schemes which I know you have interest in.
  • GMCA taking on joint ownership of the Local Skills Improvement Plan model with the Employer Representative Body; and new levers through our £10m inactivity trailblazer to support the Get Britain Working Plan for Greater Manchester, which will help you tackle inactivity and deliver improved employment outcomes through integrated work, health and skills support. We have also recommitted to co-design and delegated delivery of future employment support that is additional to core JCP provision – seeing through a commitment made by the previous government that has not yet been implemented.
  • Implementing the commitment that you will set the strategic direction of any future affordable homes programme.
  • Providing greater flexibility on your existing council tax precept, so that you can spend it on all Combined Authority functions; and legislating to allow you to capture land value at Mayoral level through a Mayoral Community Infrastructure Levy. We recognise this does not deliver all of your proposals, but we know both of these were priorities for you.

This framework represents the floor, not the ceiling of our ambitions. We want to deepen devolution across England, particularly with all Established Authorities. That is why we are creating a right for all Established Mayoral Authorities to request further devolution, and making clear that the government will continue to pilot arrangements with Established Mayoral Authorities, with a view to informing further iterations of the devolution framework. More widely, while our approach to regional growth will deliver for all parts of the UK, we also recognise the particular contribution that city regions, including Greater Manchester, have to make to growth.

Our two departments will work together to achieve this and, in that context, we have asked Sarah Healey, Permanent Secretary at the Ministry of Housing, Communities and Local Government, and Beth Russell, Second Permanent Secretary at the Treasury, to pilot a ‘task and finish’ group of senior civil servants, which will work with Greater Manchester in the first instance to explore how we can go further. This work will be completed in the Spring, so that, where possible, it can inform both the next phase of the Spending Review and the English Devolution Bill, as well as further iterations of the framework. It will focus particularly on the following areas:

  • Employment support, where we want to explore the scope for devolution of non-JCP employment support programmes, including into integrated settlements. Through DWP’s commitment to co-design these schemes, you will be involved in the discussions – and we know you will want to use this to shape a scheme that could be devolved more fully. More widely, we want to explore how devolution in this and other areas could support your ambitions on prevention by facilitating a more holistic approach to issues like supporting the inactive back to work.
  • The alignment of housing and transport, where like you we want to see a more strategic approach, including action to ensure further development around transport infrastructure. We are keen to explore a range of measures to facilitate this, and will work closely with you on the publication of the 10-year National Infrastructure Strategy. For instance, we are clear that Homes England’s accountability to established MCAs like Greater Manchester needs to increase – we know you have innovative proposals in this space and are keen to explore the options. Alongside that work, we will be reshaping Homes England’s operating model to drive delivery in line with Mayors’ local priorities and pressures.
  • Expanding devolution and partnership working into areas where we know you have strong ambitions. This should include areas such as business support where will want to work with you on delivering further devolution through the integrated settlements where appropriate, and in the context of developing the Business Growth Service. We also want to work with you to develop a future regional innovation funding programme, building on the lessons learned from the successful innovation accelerator pilots.
  • 16-19 skills, where we are committed to a national and consistent approach to education and training for 16–19-year-olds, but recognise that Mayors have a pivotal role to play in ensuring there are clear pathways of progression from education into local employment. As discussed at the Mayoral roundtable in Darlington last Thursday, we are committed to working with you and other Mayoral Strategic Authorities to develop the tools needed to deliver this. We know this is a priority for you in Greater Manchester, and this has been a key driver behind the Greater Manchester Baccalaureate. The White Paper contains commitments that will strengthen your role in relation to 16-19 technical education, including: a new joint ownership model for LSIPs (which can facilitate opportunities for 16-19 year olds to undertake apprenticeships, education and training that lead to good quality employment opportunities); ensuring Mayors have the opportunity to feed into the Department for Education’s annual strategic conversations with colleges; and working with Mayors to strengthen the convening role they can play around industry placements, where we know you have innovative ideas around galvanising employers to expand high-quality work placements. These changes will ensure you have a clear role in relation to 16-19 education and training, and we will continue the conversation on developing and deepening this role as part of the task and finish group. Areas which we could explore include: ensuring all young people and adults have access to high quality careers advice; and how we can work together to maximise the value of the T-level programme in Greater Manchester, building on the work of the Joint Oversight Board that was agreed as part of the GM Trailblazer deal.

Across all of these areas there will, of course, be constraints and trade-offs. However, we want to see the full range of options explored. We look forward to continuing this conversation, including as part of the 2025 Spending Review and the wave 1 test & learn pilot, so we can build on the White Paper and seize the opportunities for growth that would come from pushing the frontier of devolution.

Yours ever,

ANGELA RAYNER MP - Deputy Prime Minister

RACHEL REEVES MP - Chancellor of the Exchequer

Article Published: 17/12/2024 10:06 AM