No.10 North: Is London Shrinking?

Another Prime Minister, and a new plan to match. Andy Burnham wants to decentralise the government from London. The establishment of "No.10 North" is intended to better distribute political power and funding across the UK, addressing regional inequalities that have historically favoured the south-east of England.¹

None of this is new ground for him. He has criticised Westminster's "London-centric decision-making"² for years, arguing that the divide underlying the Brexit vote was London against everywhere else, uniting communities against the capital and further entrenching socioeconomic inequalities. He has also said that dealing with a London-centric Westminster as mayor gave him a better understanding of the case for Scottish independence.²

Burnham's first reshuffle was extensive. Ministers closest to former Prime Minister Starmer were removed, among them Rachel Reeves and Darren Jones, while allies who had previously quit or been dismissed returned to government.³ Pat McFadden remains as Secretary of State for Work and Pensions, kept in post to continue his work on welfare reform. He has begun devolving employment support funding to mayors and local authorities, on a rationale that echoes Burnham's own.

"People don't live their lives according to Whitehall departmental boundaries."

Pat McFadden, Secretary of State for Work and Pensions.⁴

Louise Haigh, Transport Secretary under Starmer, has returned as Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, with political oversight of the new "No.10 North" in Manchester.³ She also carries the title of First Secretary of State,⁵ a rank that formally places her above the rest of the cabinet and signals how close she sits to Burnham.

As the former mayor of Greater Manchester, Burnham's track record is mixed. His successes include bringing Manchester's buses back into public control and launching the Bee Network, with adult single fares capped at £2 and free travel for 16 to 18 year olds through the Our Pass scheme.⁶ But he made far less progress on ending homelessness and addressing affordable housing in the city, partly because of his limited powers as mayor.

Taken together, that record and his drive to move power out of London are consistent with what he has announced as Prime Minister. But can "No.10 North", and an emphasis on Manchester that critics see as excessive, bring the change that people all over the country need?

The big issues

According to the Office for National Statistics (ONS), whose June 2026 survey collected responses from adults across Great Britain, the cost of living, the NHS and the economy are the three issues most commonly reported as facing the UK.⁷

• The cost of living (88 per cent). The cost of living has been one of the two most frequently reported issues in the ONS responses since October 2022, as families across the country continue to grapple with rising prices and economic instability. Geopolitical shocks like the Covid-19 pandemic, Russia's war in Ukraine, and conflict in the Middle East⁸ have compounded this. Households have faced steadily increasing food and fuel prices as a result, as well as higher energy bills.

• The NHS (78 per cent). A 2025 engagement report published by the Department of Health and Social Care set out what the public and NHS staff in England say is going wrong.⁹ For the public, the main challenge is access, particularly to primary care such as GPs and dentists. Co-ordination between services and communication with patients were also widely reported problems, though the figures are much higher among self-selecting participants than in the representative sample. Respondents talked about the need for better community and social care, and a holistic approach to health that works across different areas of the public sector.

• The economy (70 per cent). As with the cost-of-living crisis, economic stagnation has been intensified by global political events. Political instability, such as the Brexit referendum and a subsequent high turnover of prime ministers, has limited the government's capacity to respond. Nearly two decades of underinvestment in public services and infrastructure have followed the 2008 financial crash and the austerity programme that came after it, making it difficult for ordinary people to feel their everyday lives are improving.

And Burnham's solutions?

In the face of these overlapping and deep-rooted issues, Burnham has set out the policies his government intends to lead with. The biggest shift so far from Starmer's government is Burnham's devolution plans, which he argues will make public spending more efficient and effective and ensure his policies reach the communities that need them most.

• Mayors in England will keep a share of income tax and business rates. Mayors are expected to start retaining some business rates revenue from April 2027, and to receive a portion of the income tax raised in their areas from April 2028, delivering on Burnham's devolution promises and widening their control over investment in local public services. The proportions each authority keeps are due to be set out at the Budget on 28 October.

• A 20 per cent cut to business rates for pubs, clubs, and live music venues in England. To ease cost pressures on the high street, Burnham has announced business rates will reduce by 20 per cent in 2027–28, on top of the 15 per cent reduction for 2026–27 announced in January under Starmer.¹⁰ The government hopes that this will help smaller businesses and venues stay afloat. The very largest live music venues will not be eligible for the new cut, with the threshold to be confirmed at the Budget.

• Capping bus fares in England outside London. In a bid to alleviate the cost of living, bus fares will be capped at £2 for an adult single ticket from January 2027 until the end of that year, backed by £400 million of additional funding.¹¹ This replaces the £3 cap, which had been due to run until the end of March 2027. The government has also announced a scheme allowing children aged 5 to 15 to travel for free on participating bus services across England this August.

• Scrapping VAT on domestic electricity bills. VAT on domestic electricity will be cut from 5 per cent to zero for six months from 1 October, funded in part by scrapping Starmer's digital ID project.¹² The saving is put at around £45 a year for a typical household, though the relief covers electricity and not gas, and the Ofgem price cap is forecast to rise by around 3 per cent on the same day. The funding is contested: the Office for Budget Responsibility had noted that no specific money was set aside for digital ID, so cancelling it frees up less than the £850 million the cut is expected to cost.

• Introducing technical qualifications for young people. Technical routes will be expanded and given equal standing with academic ones, a shift Burnham has placed at the centre of his education policy.¹³

Andy Burnham, Prime Minister.¹³

More than one million young people are now not in education, employment or training, and opening up routes into work for them matters both to them and to economic growth.¹⁴ Inspired by smaller-scale programmes like the MBacc in Greater Manchester, technical qualifications are pitched to channel young people into local employment in areas like healthcare, construction and energy. A post-16 route already exists in the form of T Levels, with courses in areas such as health and construction, but Burnham plans to extend vocational study down to Year 10, with the government aiming to begin rolling out the new pathways from September 2028.

Potential pitfalls

Successfully addressing complex geographical inequality is a recurring hurdle in Burnham's plans. Because mayors would retain a share of the tax raised locally rather than receive a redistribution of it, critics argue the policy favours places that already generate more revenue. Perran Moon, the Labour MP for Camborne and Redruth, has called the plans "discriminatory" and warned they could create a "two-tier system", since Cornwall has no mayoral authority and expects never to have one. The Liberal Democrats have warned of a "postcode lottery", and the Conservative shadow chancellor Mel Stride noted that no new money was announced; Lord Houchen, the Conservative mayor of Tees Valley, would rather return the revenue to taxpayers as a rebate.¹⁵ Restaurants and cafes, meanwhile, are excluded from the 20 per cent business rates cut while facing similar cost pressures: UKHospitality has forecast 963 restaurant closures across 2026 without a sector-wide settlement on rates.¹⁶

The limits of Burnham's devolution are visible in Scotland. Within days of taking office he was reported to have told First Minister John Swinney that the two would have to "agree to disagree" on a second independence referendum, and said publicly in Glasgow that he was "not focused on point scoring or discussing constitutional changes like referendums".¹⁷ He has extended devolution within England while ruling out the constitutional question Scotland is actually asking.

The overlap between these policies and the places they are meant to reach makes clear-cut solutions difficult to identify — what works for cities like Manchester won't necessarily work in rural south-west England. Education reform faces a particular funding problem. The core schools budget is set to be held flat in real terms to 2028–29, and rising spending on support for pupils with special educational needs and disabilities accounted for over half of the increase in school funding between 2019–20 and 2025–26, with the Office for Budget Responsibility forecasting a £6 billion gap between what councils spend and what central government provides by 2028–29. Funding per student aged 16 to 18 is still around 8 per cent below its 2010–11 level in colleges, and around 20 per cent below in school sixth forms.¹⁸ Burnham's plans for technical education have to be delivered inside that envelope. Health and social care faces the same problem from the other direction, with demand rising faster than the system can absorb it.

None of these challenges are unique to Burnham's tenure, and none of them yields to anything less than structural change. If his devolution plan is a step in the right direction, then its funding must be sustainable and fair for all postcodes — otherwise "No.10 North" will risk becoming synonymous with Manchester, and smaller communities will continue to fall by the wayside.

So is London shrinking? Not yet. No.10 North was created by a written ministerial statement that moved devolution and local growth strategy out of the housing ministry, and local economic growth policy out of the Treasury, into a Manchester office — while leaving both departments to carry on exercising what the statement calls their remaining functions in those areas. Downing Street says Burnham himself expects to work from Manchester at least one day a week, and on Centre for Cities' estimate roughly 95 per cent of tax revenue still flows straight to Whitehall, leaving the UK the most fiscally centralised country in the G7.¹⁹ For now the change amounts to an address and a set of strategy functions. Whether anywhere outside London grows as a result will depend less on where officials sit than on whether the money follows them, and whether it reaches the places with no mayor to collect it.