Can Andy Burnham Fix Britain's Regional Growth Gap?
Andy Burnham at SXSW in Austin, Texas, 2023
In March 2023, I was in Austin, Texas, for South by Southwest. I was there as part of the UK Department for Business and Trade's delegation, helping and leading with the communications to position Britain and its creative industries as a destination for investment and trade. Andy Burnham was also in Austin, doing the same thing for Manchester.
What struck me about him was not what he said from a stage. It was what he did when the formal sessions ended. He moved around. He asked questions rather than delivering answers. He sat with business founders, technology investors and civic leaders and he listened, properly listened, in the way that politicians who have genuinely learned something from running a place tend to do. He was not there for photocalls, though he was very good at that. There was no entourage management, no managed distance, no performance of engagement. He was curious and direct, and the people he spoke to came away feeling they had been heard.
Interestingly, I’ve since heard from companies that chose Manchester, in part, because of that quality. When Arm, the Cambridge-born semiconductor company that now sits at the centre of the global AI supply chain, opened a significant presence in Manchester, it was not solely a decision driven by property economics or graduate pipelines, though both mattered. It was also a relationship decision and an understanding of Manchester. Burnham had invested time and credibility in understanding what technology companies needed and had built a track record of following through. Reputation, as any serious business leader knows, is not what you say about yourself. It is what others say about you when you are not in the room.
That memory matters now, because on 29 June 2026, Andy Burnham delivered his first major speech as the frontrunner to become Britain's next Prime Minister, and the governing idea behind it was precisely the quality I observed in Austin three years ago: the belief that growth, trust and change are built from proximity and partnership, not imposed from above.
Andy Burnham promoting Manchester as a Tech City
What He Actually Said
Speaking from the People's History Museum in Manchester, where he served as mayor for nine years before returning to Westminster, Burnham committed to what he called the biggest rebalancing of power the country has seen. His central argument was uncomplicated and, to anyone who’s worked with businesses and investors in the regions, immediately recognisable: "Growth cannot be ordered from the top down. Instead, it can only be nurtured from the bottom up."
The centrepiece of his structural proposal is a ‘No. 10 North’ based in Manchester, which he described as the nerve centre of a rewired Britain, the conduit through which power and resources would be redistributed across the UK. He explicitly drew inspiration from Germany's constitutional commitment to equivalent living conditions across its regions and spoke of a 10-year mission to raise living standards through reindustrialisation, housing, infrastructure and the reform of essential utilities. He called it ‘Manchesterism’: place first, not party first; problem-solving, not point-scoring.
The media response was mixed, as it tends to be when ideas challenge the institutional gravity of London. Some of the criticism was substantive. Bloomberg pointed to unanswered questions about fiscal architecture. The Scottish Greens rightly noted that Scotland, Wales and Northern Ireland received thin treatment in a speech that was primarily framed around England. Political opponents on the right called it all talk. Commentators on the left worried about the pace of ambition against fiscal constraints inherited from the Starmer years.
These are legitimate tensions and they deserve serious engagement. But the media cycle has a tendency to reach for the procedural critique before it has sat with the strategic proposition. The strategic proposition here is more important than the implementation questions, which are resolvable, and more durable than the political theatre of a leadership transition.
The Structural Diagnosis Is Not a Political Opinion
Before examining what other countries have learned and what Britain might borrow, it is worth establishing that the underlying diagnosis Burnham is making is not contested by serious economists.
The UK's regional productivity gap is among the largest of any OECD nation. As an example, London and the South East generate productivity levels roughly 63% higher than Wales. Gross value added in London is more than double other regions. The Productivity Institute, drawing on extensive comparative research, has found that UK cities including Manchester, Birmingham and Glasgow show productivity levels well below comparable cities in continental Europe, and that the journey has been made more difficult in Britain because of a lack of devolved government, coordinated policymaking and sustained funding. In other words, the problem is not the character or capability of people in those cities. It is the architecture of how decisions get made and resources get allocated.
The National Institute of Economic and Social Research goes further, identifying short-term policymaking, over-centralisation, siloed government departments and constant changes of strategy as core causes of the UK's persistent productivity failure. The analysis from the London School of Economics adds another dimension: limited state intervention through industrial and regional development policy has meant no substantive regeneration in former industrial heartlands, while highly productive frontier firms remain disproportionately concentrated in the South.
This is the inheritance Burnham is working with. It is not a problem of northern ambition or local talent. It is a structural consequence of a model of governance that has treated regions as implementation zones for policies designed in and for a city that accounts for 9 million of Britain's 67 million people.
What Other Countries Have Learned
Britain is not the first country to have wrestled with the question of how much economic decision-making power should sit with central government versus regions. The international evidence is now substantial, and it points consistently in one direction.
Spain is the most instructive current example, and it is one I know something about from both my heritage and my professional work across European corridors. Spain has outperformed most of the EU in recent years, with GDP growth of around 2.8% in 2025 and forecast to maintain above-average European growth through 2027. It is not a uniform story: the 17 autonomous communities perform differently, with Madrid, the Mediterranean arc and the islands leading in services and consumption while the more industrial northern regions face greater headwinds. But the heterogeneity is, in itself, the point. Each region responds to its own structural strengths rather than executing a single national template imposed from the capital.
The Basque Country, where I am from, is the single most compelling case study within Spain and Europe. With extensive fiscal and legislative autonomy since 1979, including its own tax collection system, the Basque government has built one of the most competitive innovation economies in Europe. The Financial Times's fDi report ranked it the best medium-sized region in Europe for connectivity and among the top globally for investment attraction strategy. Its GDP per capita is 15% above the EU average and 23.4% above Spain's. It has decoupled economic growth from emissions, reduced inequality and built world-class industrial clusters in advanced manufacturing, aeronautics, energy and finance. The Mondragon cooperative network, the world's largest worker-owned enterprise group, grew there precisely because the region had the autonomy to shape its own industrial culture.
The key mechanism is not simply that the Basque Country has more powers. It is that having fiscal autonomy increases the likelihood that policy choices are actually implemented rather than dissipating through the bureaucratic intermediaries of a larger centralised national state. When local leaders control how money is raised and spent, their choices align with local economic reality.
Germany's Länder model is well known and Burnham himself invoked it. The comparison is often challenged, and the challenge is fair. Bavaria's success has been built over generations. East Germany, despite Germany's constitutional commitment to equivalent living conditions, has never closed the economic gap with the West. The lesson from Germany is not that constitutional federalism automatically produces regional equality. It is that where regions have sustained fiscal tools, genuine policy ownership and deep university-business-government triangles, they can build competitive advantages that no central government could have designed for them. In Germany and Switzerland, subnational governments manage over 40% of public expenditures. This is associated with higher regional productivity, not lower.
The Nordic countries offer a different lesson, equally relevant. Sweden, Denmark and Finland have built some of the world's highest-trust democracies on a model where local governments bear genuine responsibility for delivering public services, and where central-local relations are built on mutual trust rather than supervision. The mechanism that produces trust in Scandinavian governance is precisely the one missing in Britain: proximity. When citizens can see who is responsible for the services they use, and when those responsible people can be held accountable at a local level, satisfaction with public services rises and trust in the political system follows. In Denmark, local government expenditure accounts for 64% of total public spending, the highest in the EU. The result is not fiscal chaos. It consistently secures high citizen satisfaction and some of the world's most effective public services.
Canada's block grant model to provinces offers yet another variant, relevant because it operates within a different constitutional tradition. Provinces receive funding that is loosely earmarked for certain spending areas but have genuine freedom over how it is deployed. The evidence from multiple comparator countries is that loose earmarking alongside a supportive rather than supervisory role from the centre leads to increased effectiveness of spending and enables regions to take initiative rather than execute on central directives.
The OECD has concluded that sub-national fiscal autonomy is a consistent driver of productivity and investment. This is not ideological. It is empirical.
The Manchester Record Is Not a Theory
What makes Burnham's proposition different from the long line of Westminster thinking and politicians who have promised regional rebalancing and delivered very little is that he has actually run the experiment. The Manchester results are measurable.
According to the EY UK Attractiveness Survey, Manchester has been the best-performing city outside London for foreign direct investment for four of the past six years, with North West companies collectively raising over £1.8 billion in venture capital across that period, outpacing European cities including Rome, Brussels and Lisbon. Greater Manchester was ranked the best-performing UK city outside London for attracting foreign direct investment in 2024, for the third consecutive time in five years. The US alone accounted for 27% of all foreign direct investment into Greater Manchester, creating nearly 800 jobs and £42.6 million in gross value added in a single year. Annual growth across the city region averaged 3.1% since 2015, outpacing the national economy. The £1 billion Good Growth Fund, backed by the Greater Manchester Pension Fund, was designed to pump-prime stalled sites and recycle returned capital back into the pipeline: a model of patient, compounding local investment rather than short-term grant dependency.
Arm's Manchester presence is a useful signal. Arm's IP sits inside the vast majority of the world's smartphones and is increasingly central to the AI infrastructure investment that is defining the next decade of global technology competition. The decision to establish a significant operation in Manchester was not made in spite of a mayor's active engagement. It was made, in part, because of it. Technology companies, sovereign wealth funds and corporate venture arms all make location decisions based on signals of institutional quality: the credibility of local leadership, the depth of the talent pipeline, the evidence of follow-through. Burnham built those signals over nine years. The question now is whether the machinery of national government can be rewired to let other regional leaders do the same.
The Trust Crisis: The Deepest Reason This Matters
The economic case for devolution is strong. The trust case is urgent.
The British Social Attitudes survey now records just 12% of the British public trusting governments to put the country's interest before party interest most of the time. This is the lowest figure in the survey's 40-year history. The 2026 Edelman Trust Barometer found that only around a third of the UK public expect their government to do what is right. The Ipsos Veracity Index places politicians and government ministers among the least trusted professions in the country, alongside social media influencers.
This is not an abstract democratic concern. It is a direct economic liability. Businesses make investment decisions based on their assessment of institutional quality, predictability and the credibility of the environment in which they are operating. Reputation, in the fullest sense, is the currency that attracts long-term capital, retains talent and enables the kind of public-private partnership that major industrial and infrastructure decisions require. A country whose population has stopped believing in its institutions is a country that is gradually losing the trust premium that makes it competitive as an investment destination.
The evidence from Scotland and Wales is instructive here. In both nations, people are measurably more likely to trust their devolved governments than the UK Government. The devolved institutions are not perfect, but they are closer, more visible and more accountable to the communities they serve. In countries that have introduced meaningful devolution, citizen satisfaction with public services has consistently improved. The 2026 OECD Survey on Drivers of Trust found that only 31% of people across surveyed countries feel the political system allows people like them to have a say. Voting alone is no longer sufficient. Citizens need to feel heard between elections, and that requires decision-makers who are proximate, responsive and whose performance is visible.
Burnham's instinct is correct: trust is rebuilt from the ground up. It is rebuilt by a mayor who stays in the room after the panel session has ended, who engages with the founder trying to scale a business and the investor trying to understand a city's long-term trajectory. It is rebuilt by delivery that people can see, touch and attribute to someone they recognise. The £2 Bee Network bus fare in Manchester was not a grand national policy. It was a tangible, personal improvement in the daily lives of people who could see exactly who had made it happen. That is the mechanism. Visible local delivery, by accountable local leaders, with the fiscal tools to make sustained commitments, is how trust is restored.
The Implementation Challenges Are Real and Should Be Named
Intellectual honesty requires acknowledging what is genuinely difficult here.
Splitting the prime ministerial operation between London and Manchester raises genuine coordination questions on foreign policy, defence and fiscal decisions that require speed and unity of message. The civil service, which Burnham himself acknowledges he spent a decade fighting as mayor, will resist. Bringing in people who have actually operated in regional economies, built businesses outside the M25 and navigated local industrial transition is not optional. It is the difference between a policy announced and a policy delivered.
There is also a perception challenge that anyone who has worked on promoting the UK as an investment destination will recognise. The House of Commons Public Accounts Committee found, drawing on DBT's own evidence, that overseas investors may initially be aware of London as an investment destination and only London. The IFS has sharpened the point: investors overprice risk outside London not because regional fundamentals are weaker, but because they understand those places less well. The only areas where investor risk pricing has begun to converge with London levels are Greater Manchester and the West Midlands, the two city regions with the most established devolved powers and the most recognisable mayoral leadership. Reputation built on genuine delivery reduces the risk premium. Every region empowered under a devolution settlement needs not just the fiscal tools to act, but a place within a coherent national investment narrative. The UK brand is the hook. The regional proposition is what closes the conversation.
Shaping Perception Through Delivery
There is a strand of political communication that believes reputation can be managed through messaging. This is wrong and the evidence of the last decade suggests it cannot. Britain's trust crisis has been deepened, not alleviated, by a political culture that has prioritised the announcements and headlines over the outcome, the press release over the proof point, the narrative over the result.
Burnham's personal brand, built over nine years of visible mayoral delivery in one of Britain's most watched cities, offers a different model. His reputation with the technology sector is not the product of a communications strategy. It is the product of being present at SXSW and listening. Of understanding that Arm needed a talent ecosystem and a transport network as much as it needed a property deal. Of building relationships over time with the patience that serious investors recognise and value.
Shaping perception, in the way that matters to business, to investors and to citizens, requires delivery that is visible, sustained, attributable and makes a difference to people. Burnham's strongest card is that he has demonstrated, at a city-region scale, what that looks like. His greatest challenge is to build the institutional conditions that allow it to happen at national scale, against the grain of a civil service culture that has been designing policy from the centre for as long as anyone in it can remember.
The international evidence, from the Basque Country to Bavaria, from Copenhagen to Calgary, is that this is possible. It takes longer than one parliament. It requires fiscal tools that are not yet fully specified and I would suggest a lot more and under used demand-side fiscal incentives. It will of course face resistance from institutions that have a structural interest in the status quo. But with a new leader of the Civil Service with experience of delivery, the opportunity is there.
Of course, the alternative, continuing to design national growth policy in London for a country whose regions have been left behind for decades, is not a neutral position. It is a choice that has produced the productivity gap, the trust deficit and the political fragility that created the conditions for Burnham's moment in the first place.
Growth from the ground up is not a slogan. In the right institutional conditions, with the right calibre of local leadership and the sustained commitment that has been conspicuously absent from British regional policy for a generation, it is a proven model. Andy Burnham has the track record and the instinct. Britain now needs not just new architecture. It needs a focus on less talk talk and more on delivery.