Burnham Could Give UK Mayors 20% of Any Business Tax Growth

Britain’s mayors will be given a 20% share in any revenue growth from local business taxes, under a proposal by Prime Minister Andy Burnham’s government.

The policy is designed to incentivize mayors to boost development and economic growth in their regions, a central tenet of the PM’s vision for the country. Burnham was mayor of Greater Manchester for nine years before replacing Keir Starmer as Labour leader in July.

A budget proposal put forward to local leaders, a summary of which has been seen by Bloomberg, suggests replacing some grants to mayors with income directly from a property-based tax called business rates. The amount of money they receive in future years would then be linked to overall revenues from business rates.

They would also have more autonomy about how to use the investment.

By replacing grants with a baseline funding, the initial share of business rates would be fiscally neutral. On top of this mayoral authorities would then receive a 20% share of business rates revenue growth. Local economic growth over a certain amount would be levied, with this money used to fund a proposed safety net system to provide a minimum income if business rates revenues were to fall.

Under the policy, which would come into force next April if approved before the budget, local authority funding will not be impacted and the central government will still retain a 30% share of revenue.

The government did not immediately respond to a request for comment.