Prime Minister Andy Burnham is launching what the government describes as the biggest transfer of power, funding and responsibility from Westminster in a generation.
The package will give English mayors a share of income tax revenues for the first time. The government said this would mean places that create jobs and grow their economies keep more of the rewards, giving local leaders more scope to invest in local priorities.
The plans also include a greater share of business rates revenues for mayors, with retention beginning next spring. Further details on business rates and income tax retention are due to be set out in a roadmap at the Budget.
The government said the reforms are intended to give communities greater control over decisions on jobs, transport, housing and public services. Areas without a mayor will be supported to establish strategic authorities and gain more control over local priorities.
In his second week in office, the Prime Minister is due to tell Cabinet that decision-making should move out of SW1 and closer to people’s lives. He said more taxes raised in a community should stay in that community, and that local leaders should have powers and resources to improve public transport, build homes and create jobs.
Chancellor John Healey said local leaders were best placed to understand the skills employers need, transport requirements and where investment could have the greatest effect. He said sharing income tax revenues with mayors was intended to help communities benefit directly when their economy grows.
The government said the approach would require departments to justify why powers should remain in Westminster rather than be handed to local leaders. It said the wider goal was to give every part of the country tools to create stronger local economies, improve public services and shape its future.