A New Power Centre in Manchester

Prime Minister Andy Burnham has announced that No 10 North, based in Manchester, will take over responsibility for economic growth from the Treasury. Describing the move as part of a "huge transfer of power" away from Whitehall, Burnham said the significance of the new department would become "more and more apparent as we go forward." The Prime Minister argued that the Treasury's dual role in promoting growth and controlling public finances "sometimes clouds that growth mission." He told the Times: "Having No 10 leading on that growth mission means you've got maximum power to unlock the blockages where they exist in the Whitehall system."

Chancellor John Healey is said to be on board with the plan, which effectively strips him of the growth side of his job, with First Secretary of State Louise Haigh given ministerial oversight of No 10 North. Housing Secretary Angela Rayner insisted the plans were "not at all" a demotion for Healey, saying the chancellor is "working really hard" with the PM and cabinet colleagues. Rayner added that the Cabinet is "really clear on our intent to put devolution and community empowerment at the heart of this Government."

Burnham also addressed critics who dismissed No 10 North as a "satellite office," slamming such characterizations. He said: "It is actually a huge transfer of power. It's something that the country has never cracked before."

Devolution in Action

As part of the new approach, Burnham has announced that more than 100 Whitehall officials will be sent to bolster the teams of regional mayors. The government described the meeting at No 10 North as a "situation room" to bring local and regional leaders into national decision-making. Five to 10 civil servants will be sent to every mayoral authority for secondments of less than a year during a pilot programme in 18 mayoralties.

Mayors had requested the extra capacity at the first meeting of Burnham's National Economic Council at the end of last month. There will also be a new civil service fast stream pilot in Yorkshire and Humber, and an expansion of the future leaders scheme to mayoral and local authority officials. Burnham said No 10 North was "bringing together mayors from different political parties to work on these challenges, because people deserve problem-solving rather than point-scoring."

Louise Haigh said the move marked an end to "the days of Westminster hoarding power" and would be the biggest transition of power and resources in a generation away from Whitehall. Mayors have long been requesting more firepower from Whitehall, although on their own terms. The meeting included cabinet ministers such as Healey, Rayner, and housing minister Sally Jameson, with mayors from across the country dialling in.

Economic Challenges and the Budget

The announcement comes as the UK government ran a larger than expected £1.8bn deficit in July, with city economists having expected a shortfall of zero. The Office for National Statistics said spending growth outpaced receipts, despite self-assessment tax paid in July being £1.7bn higher than last year at £17.1bn. The cumulative deficit in the first four months of this financial year was £56.7bn, £2.3bn ahead of the Office for Budget Responsibility forecast.

Chancellor John Healey will announce his budget on 28 October, with public finances expected to be gloomier than at Rachel Reeves's spring statement in March. The economic context adds pressure to the government's growth ambitions. Healey stressed that growth would be a "dual mission" between No 11 and No 10 North, stating the government is "getting on with getting things done" and committed to "good growth in every postcode."

Historical Precedents and Skepticism

Burnham is far from the first prime minister to try to tame the Treasury. Boris Johnson all but forced the resignation of Sajid Javid, Margaret Thatcher favoured her economic adviser Alan Walters over Nigel Lawson, and Tony Blair and Gordon Brown's power struggle was the stuff of Whitehall legend. Burnham's approach harks back to Harold Wilson's Department for Economic Affairs (DEA), a short-lived attempt to bring long-term thinking to British economic policymaking. The DEA was responsible for drawing up a national plan for the economy, but was ended by 1969 with its powers sucked back into the Treasury.

Some commentators question whether the split will address the blockages Burnham identified or simply create more work as officials negotiate differing agendas. John Healey is described as collegiate and undramatic, while Louise Haigh has a reputation for being more stubborn. The political dynamic may change: chancellors often absorb negativity, but under this model GDP becomes tied to Burnham. Treasury forecasts do not suggest strong economic growth any time soon.

Former Conservative chief secretary David Gauke says the Treasury is always going to be the most important department, questioning whether No 10 North can work given limited face-time with the PM. A Treasury source stressed that No 10 North will focus on "local growth" and devolution, not taking over economic strategy from No 11. The Treasury has "lent" staff, with Beth Russell working with the Manchester team, and Sam Lister appointed as No 10 North's director.

Policy Direction and Infrastructure

Burnham's headline policies have focused on putting money back into people's pockets, but they also reveal an attempt to remodel the state around principles from his time as Mayor of Greater Manchester. In his first speech as Prime Minister, he set out priorities including "good growth in every postcode." Further devolution sits at the heart of that ambition, with No 10 North suggesting growth built from local places outwards.

Public control of utilities is high on the priority list, with Burnham having advocated greater public ownership of water and energy. Thames Water's ongoing financial difficulties could accelerate progress. He has also committed to "the biggest council house building programme since the post-war period" and re-industrialisation. Public procurement is set to become a central lever, with infrastructure investment judged on jobs, skills and supply chain opportunities.

In his first few weeks, the focus has been on policies people feel in day-to-day lives. One of the first announcements was a £2 cap on bus fares, imported directly from Greater Manchester. The removal of VAT on household electricity bills from 5% to zero, from October, is expected to save households £45 a year. Technical education courses linked to local industry will be introduced for students as young as 14 from 2028. Burnham argued the country should value "the hard hat as much as the graduation cap."

More detail is expected at the Autumn Budget, alongside a 10-year plan to transform the economy. The Institution of Civil Engineers will continue advocating for the government to stick to the 10-Year Infrastructure Strategy.

Perspectives

Government View

Prime Minister Burnham and his allies, including Chancellor John Healey and Housing Secretary Angela Rayner, portray No 10 North as a historic transfer of power that will unlock growth by removing blockages in the Whitehall system. They emphasize collaboration between departments and devolution to local leaders.

Skeptical View

Commentators and former officials, such as David Gauke, question the feasibility of the plan, pointing to historical failures like Wilson's DEA and the Treasury's enduring power. They worry about new frictions between departments and the political risks for Burnham if growth fails to materialize.

Expert View

Economists and think tank figures like Ruth Curtice and Sanjay Raja see potential in better coordination and devolution, but also note the challenges of policy clashes and the need for institutional cooperation. Some draw parallels with successful models like the Office for Climate Change.