Type: Infrastructure blog

Rewiring the State: what does England’s devolution mean for infrastructure?

Date: 12 August 2026

These reforms would change where decisions are made, who holds influence, and how infrastructure and other investment priorities are determined.

Rewiring the State: what does England’s devolution mean for infrastructure? — Mayoral combined authorities, such as the one in Greater Manchester, already hold more control over transport, skills and housing decisions. Image credit: Shutterstock

For decades, governments of all colours have argued that England is too centralised. Despite some progress, Whitehall has retained tight control over funding, policy and investment decisions.

Now the government, under new Prime Minister Andy Burnham, is signalling a more radical shift.

A Cabinet Office statement published in July, Rewiring the State, set out a sweeping package of reforms intended to transform the relationship between central government and England's regions.

The proposals are heavily associated with Burnham’s time as Mayor of Greater Manchester: stronger regional leadership, more control over local funding and an increased role for local leaders in day-to-day decision-making.

The headline announcement is that mayoral authorities will get to keep a share of income tax revenues, alongside more business rates income. But focusing on these funding changes alone risks missing the bigger picture.

Instead, it sets out a roadmap to reshape how England is governed, transferring powers, responsibilities and accountability away from Westminster and towards regional institutions.

If implemented, it would represent the most ambitious step forward in English devolution since the creation of metro mayors.

For civil and infrastructure engineers, this matters because it could fundamentally change where decisions are made, who holds influence and how investment priorities are determined.

What is English devolution?

Unlike Scotland, Wales and Northern Ireland, England has remained comparatively centralised relative to the size of its population. Major decisions have generally been made in Whitehall, with local authorities often required to compete for funding from central government.

Over the past decade, successive governments have sought to devolve some powers, notably through the creation of mayoral combined authorities that are led by directly elected mayors. Greater Manchester, the West Midlands, South Yorkshire and many others have acquired varying degrees of control over transport, skills, housing and economic development.

The reforms aim to take that process significantly further. The government wants every part of England to be covered by a strategic authority by 2028, while granting mayors greater influence over planning, transport, housing, skills, health and local economic growth.

Fiscal devolution: enabling funding to flow across the country

Most attention has focused on proposals to assign a share of local income tax revenues to mayoral authorities from April 2028.

This seeks to address the fact that local leaders currently have limited incentives to grow their economies when much of the resulting tax revenue flows back to the Treasury.

Greater revenue certainty could also create new opportunities for infrastructure investment. Having a more reliable source of income means authorities can borrow money with more confidence and fund major projects over the long term.

The reforms do not represent new money. Instead, they alter how funding flows through the system and who has a choice over spending decisions.

Beyond tax reforms: devolve by default

One of the more under-the-radar proposals is the government's commitment to a new ‘devolve by default’ principle.

Under this approach, ministers would be expected to justify why powers should remain in Whitehall rather than automatically assuming that central government is the appropriate place.

The government has also committed to a review of the functions currently carried out by arms-length bodies; organisations such as the Care Quality Commission, Environment Agency and Natural England. This will explore whether they should remain independent, return to government departments or be transferred to local leaders.

Prime ministers have repeatedly attempted, and failed, to reduce the size and operational role of Whitehall.

Central government tends to pull powers back towards itself, particularly when major projects fail or political pressures emerge. The true test will be whether departments will let go of meaningful control rather than simply delegate responsibility while retaining oversight.

Infrastructure decisions are likely to become more regional

Perhaps the clearest implication for infrastructure is that decision-making is likely to move further away from Whitehall.

The government has announced an immediate increase in Department for Transport approval thresholds for locally funded transport schemes, raising them from £200 million to £500 million. This means local leaders have more scope to promote and lead on projects without central government oversight.

Mayors are also set to gain stronger powers to intervene in the planning system and broader control over transport, housing and economic development.

Taken together, these changes give regions a greater role in setting infrastructure priorities, developing business cases and planning investment.

A stronger case for regional infrastructure governance

Devolution could also strengthen the argument for more formal regional infrastructure planning.

If mayoral authorities gain more powers, funding and borrowing capacity, they will need stronger mechanisms to identify infrastructure priorities and coordinate investment.

This matters because infrastructure challenges often cross local authority and organisational boundaries.

The ICE has previously called for the creation of subnational infrastructure bodies to develop regional infrastructure strategies to identify needs and suggest targeted investment.

New opportunities, but also new risks

Devolution is not without trade-offs.

A system that gives places greater autonomy will inevitably produce variation. Some authorities will demonstrate strong leadership and effective delivery, while others may struggle with capability, capacity or political instability.

There are also questions about how the government balances prosperity between regions.

Areas with stronger economies will generate higher tax revenues, raising concerns that fiscal devolution could widen existing inequalities.

The government plans to address this through ‘equalisation arrangements’, with more details due in a white paper alongside the Budget on 28 October.

Another challenge concerns places without mayoral authorities. Although the government's ambition is for nationwide strategic authority coverage, differences in powers and capability risk creating a two-tier system.

The ICE’s view

Infrastructure policy is set to become progressively more subnational.

If Whitehall focuses on setting national priorities, strategic frameworks and accountability mechanisms, regional leaders can take greater responsibility for delivery and investment decisions.

Whether that vision is fully realised remains uncertain. Much will depend on the detail of the forthcoming white paper and the legislation that follows. But the broad direction is clear.

Mayors, combined authorities and other local leaders are all likely to become increasingly influential actors.

The emergence of a new layer of regional leadership that plays a larger role in deciding what gets built, where investment flows and how infrastructure supports economic growth means that England's infrastructure policymaking landscape could look very different by the end of the decade.