Successive UK Government’s have set out plans to devolve more powers from Westminster to regional areas. Now, those powers look set to expand further with plans announced to share a portion of income tax with mayoral authorities, with enhanced powers over services such as housing, transport and skills also expected. At GC Insight, we provide evidence, analysis, tools and know-how to help combined authorities across the UK to drive local growth. In this article, we explore the growth of combined authorities, what new powers are expected, and what opportunities and challenges increased devolution could present for these authorities and their local areas.
Combined Authorities are devolved bodies in England formed by groups of neighbouring councils that take decisions and deliver activity across a larger economic or functional geography. Their powers are devolved down from central government and they do not replace local councils, instead they aim to shape policy and investments that benefit from strategic co-ordination across a wider area. Although their focus continues to evolve, they typically take on transport, skills, housing, regeneration, economic development and inward investment.
The first Combined Authority was setup in Greater Manchester in 2011, with a number following later in the 2010s in Liverpool City Region, South Yorkshire, Tees Valley, the West Midlands, West Yorkshire, the West of England, the North East, and Cambridgeshire and Peterborough. Over recent years, the Government has supported the creation of a number of new Combined Authorities including in areas including the East Midlands, Hull and East Yorkshire, and Cumbria.
While originally known as Combined Authorities, they are increasingly collectively referred to as ‘Strategic Authorities’ which encompasses:
Devolution in England has continued to evolve gradually, though this has accelerated over time and under multiple Governments. The UK has a particularly centralised system of governance and this is particularly true for how taxation is collected. According to the OECD, only 5.8% of national taxes in the UK are collected at a local level. This is the lowest level in the G7, and far behind countries such as France where over 20% of national taxes are collected locally, and the United States where over 45% of taxes are collected locally. Although not imminent, this could start to change in the next few years.
So far, the new Prime Minister Andy Burnham, has announced his intention for strategic authorities to be given a share of income tax revenue and to strengthen their ability to retain some of the cash collected from business rates in their areas. The majority of their current funding simply comes from central Government under deals they have negotiated. More details on all this are expected in the Autumn Budget.
The Modern Industrial Strategy which launched under Keir Starmer underlined the importance of local growth with areas designated as priority clusters for growth across different sectors such as advanced manufacturing, clean energy industries, life sciences and more. Mayoral areas were also expected to create Local Growth Plans for their areas and there has been encouragement to increase collaboration between the regional areas and central Government. The formation of the Mayoral Council in 2024 saw locally elected Mayors meet with Government ministers to discuss devolution, delivery and the coordination of local and national policy. In addition, a Mayoral Data Council was established in November 2024.
Now under new leadership with Andy Burnham becoming Prime Minister in July 2026, the Government is expected to affirm its commitment to further devolution and local powers, in order to achieve “growth in every postcode”. This Government clearly believes that better decisions can be made at a local level rather than in Westminster. Combined authorities are closer to the people and businesses they serve and they can better co-ordinate local partners in their area to ensure more joined up interventions. With increased powers and funding will come increased expectations to drive growth outcomes for local communities and added pressure to demonstrate accountability to local stakeholders. Tackling youth unemployment and record levels of economic inactivity among young people is one topic where combined authorities are expected to be given a bigger role, by better connecting schools, colleges, independent training providers, voluntary sector support services and local arms of central government to offer rounded support that better connects with local employment opportunities. There may also be changes to the education system to better match the needs of employers in the curriculum and more work experience of young people.
Expanded devolution could offer a variety of opportunities for local areas to deliver locally-designed change. Some of the key opportunities of expanded devolution could include:
Accelerated devolution could however encounter a number of potential challenges:
The expansion of devolution marks a significant shift in how economic growth, public services and investment are delivered across England. With Government looking to go further, strategic authorities will play a bigger role in shaping local growth, tackling labour market challenges and delivering place-based solutions. However, greater powers and financial settlements alone do not guarantee better outcomes. Authorities will need to build capacity, evidence, partnerships and leadership if they are to make the best of new responsibilities and deliver stronger local growth outcomes.
At GC Insight, we work with combined authorities and strategic authorities across the UK to provide the evidence, analysis and insight needed to support local decision-making. From economic strategies and local growth plans to sector studies, business support reviews, evaluations and data intelligence tools, we help places understand their opportunities, prioritise investment and maximise the impact of devolved powers. Get in touch with our team to find out more.
Published: 05 August 2026 - Author: Nathan Shoesmith
