The proposals aim to make devolution the default, give local leaders greater control over funding and economic priorities, and join up services more effectively around the needs of places and communities.
GC Insight supports local authorities, combined authorities and public-sector partners to understand policy change and translate it into effective local action. This article explores the key themes within Rewiring the State, what the reforms could mean for local places, and the factors that can help turn greater local control into inclusive growth and improved outcomes.
Rewiring the State follows several attempts to give places a greater role in shaping growth and prosperity. Over the past 25 years, the regionalism agenda of the late 1990s and 2000s introduced Regional Development Agencies and Regional Assemblies; the localism agenda of the 2010s brought Local Enterprise Partnerships alongside the Northern Powerhouse and Midlands Engine; and the Johnson and Sunak Governments pursued Levelling Up through competitive funding pots. This history creates an important test for the new agenda: whether it can deliver a more durable transfer of power than the initiatives that preceded it.
English subregional devolution is not new: devolution deals have developed since the Greater Manchester Combined Authority was established in 2010. Rewiring the State aims to accelerate this process by transferring more powers currently held by central government to local and strategic authorities across England. The Burnham administration and the Cabinet Office set out these ambitions and a high-level overview of the proposed approach in the policy paper Rewiring the State.
As a former Mayor, the Prime Minister is a strong advocate of devolved governance and has direct experience of the barriers that can prevent it from fulfilling its potential. Rewiring the State seeks to distinguish itself from earlier initiatives by making devolution the default across England, giving local leaders greater control over funding and economic priorities, joining up services such as housing, transport and skills, and tailoring investment and delivery more closely to the needs of individual places.
The Rewiring the State paper contains a wide range of proposals that can broadly be grouped into four interconnected themes: devolution, public service reform, economic reform, and place-based growth. Together, these themes reflect a shift away from a highly centralised model of governance towards one where local leaders are given significant responsibility for shaping economic and social outcomes.
The clearest expression of the agenda is its focus on devolution and stronger local leadership. Some experts argue that too many decisions that affect growth are made by leaders who don’t have sufficient on-the-ground knowledge of communities, including decisions about infrastructure, skills and public services. Rewiring the State responds with a ‘devolve by default’ approach: powers would be exercised locally unless there is a clear reason for central government to retain them. This is supported by the Local Government Association as a positive step, with the association having long advocated for more substantial and widespread forms of devolution.
An essential aspect of the paper is a recognition that not all parts of the UK have equal access to the devolved levers of power. The agenda seeks to build on the Devolution White Paper and English Devolution and Community Empowerment Bill by simplifying the system of bespoke place-by-place devolution agreements to a simplified and established devolution journey. This does not mean forcing Mayoral leadership on areas that do not want them or transferring the highest levels of power to areas which do not have the experience or capacity to exercise it; rather it seeks to create a clear direction of travel for local areas.
Another major theme of the paper is a more place-based approach to public services. In the context of Rewiring the State, ‘public services’ are services that Government, non-departmental public bodies and local authorities provide to support the daily lives and wellbeing of people. The underlying aim of the Burnham Government’s Rewiring efforts is to further enable local leaders to join up decision-making, respond more effectively to local circumstances and improve outcomes for residents.
The paper also proposes giving local areas greater control and certainty over funding. This includes increasing the share of locally generated revenue retained within an area, including business rates revenue and income tax, while moving away from short-term competitive bidding towards more flexible funding arrangements. Strategic authorities would also gain new revenue-raising powers, such as an Overnight Visitor Levy, enabling mayors to raise locally spendable income from overnight stays.
Place-based growth runs throughout the Rewiring the State paper as a key theme. By giving local leaders greater influence over funding, skills, transport, housing and public services, the agenda could help places align investment around their particular strengths, weaknesses and goals. The opportunity is not simply to move decisions out of Whitehall, but to connect economic policy more closely to the conditions that shape growth in each area.
For local places, Rewiring the State could mark a significant shift in who shapes growth and how investment decisions are made. Greater control over funding, skills, transport, housing and public services could allow local leaders to respond more directly to local priorities, build on their area’s distinctive strengths and tackle barriers that have persisted under England’s highly centralised system. However, devolution alone will not guarantee better outcomes. Its success will depend on whether new powers are matched by sufficient resources, accountability and the capacity to deliver.
The immediate task for local areas and strategic partners is to prepare for both the opportunity and the transition. This means strengthening partnerships, developing a shared understanding of local economic and social needs, and ensuring that robust evidence informs priorities, investment and delivery. Places that build this foundation now will be better positioned to influence and take advantage of the emerging framework, use new powers effectively and translate institutional reform into inclusive growth and tangible improvements for residents.
At GC Insight, we support local authorities, combined authorities and public sector partners through periods of change and transformation. From building robust evidence bases and assessing policy impacts to developing strategies, business cases and evaluation frameworks, we help places understand the implications of reforms, manage transitions effectively and make informed decisions for communities, services and local economies. Get in touch with our team to find out more.
