Can Burnham Break London’s Economic Gravity? The Case for a New Regional Strategy for England

Prime Minister Andy Burnham’s ambition to rebalance Britain’s economy represents one of the most consequential challenges facing his new government. His promise of “growth in every postcode” is not simply a commitment to regional investment; it is an attempt to address a structural problem that has shaped the English economy for decades — the extraordinary economic and political concentration of activity around London and the wider South East.

My highlights the scale of the challenge as Burnham tours the country seeking to reconnect government with communities outside the capital. The central question is whether greater devolution and regional investment can genuinely reduce London’s “magnetic pull” or whether market forces will continue to reinforce the capital’s dominance.

London’s Enduring Economic Advantage

London’s dominance is not merely the result of government spending. It is reinforced by powerful market dynamics, including access to finance, highly skilled workers, universities, international businesses, infrastructure and technology investment. The Guardian analysis notes that the London-Oxford-Cambridge “golden triangle” attracted almost 70% of investment in Britain’s high-growth technology sector in 2023, with London alone recording 132 foreign direct investment projects.

The emergence of artificial intelligence and advanced technology could potentially deepen this concentration. These industries tend to cluster around established financial centres, universities, research institutions and pools of specialist talent. Consequently, without deliberate intervention, the next generation of economic growth could become even more London-centric.

This creates a fundamental policy dilemma for Burnham: how can government encourage London’s continued international competitiveness while ensuring that technological and economic growth does not widen regional inequalities?

Infrastructure Choices Reveal the Challenge

The debate is illustrated by contrasting infrastructure priorities. The proposed Lower Thames Crossing, estimated to cost £10 billion to £11 billion, is intended to improve connectivity around London. At the same time, the cancellation of a planned 13-mile A1 dualling project in Northumberland has been cited as evidence of the difficulty northern and peripheral communities face in securing major infrastructure investment.

These decisions have significance beyond individual roads. Infrastructure shapes where companies invest, where people live and work, and which regions can attract new industries. If major transport, energy and digital investments disproportionately strengthen already successful regions, government efforts to achieve economic rebalancing can become self-defeating.

The issue is therefore not whether London should receive investment. As one of Europe’s major global cities, London requires substantial infrastructure to remain competitive. The deeper question is whether national investment policy simultaneously creates alternative centres of economic gravity elsewhere in England.

Devolution Could Change the Economic Model

Burnham’s proposed solution is greater devolution to England’s 18 mayoral strategic authorities or city-regions, potentially including greater control over locally raised income tax and business rates. The proposal represents a significant departure from the highly centralised model in which major economic decisions have traditionally been concentrated in Whitehall.

The potential advantage is that regional leaders could tailor economic policies to local strengths. Manchester might prioritize advanced manufacturing and digital industries; northern cities could develop stronger transport and logistics networks; coastal communities could pursue tourism, clean energy and maritime industries; and rural areas could receive policies designed around agriculture, environmental services and connectivity.

However, devolution alone will not automatically produce equality. Wealthier regions could have greater fiscal capacity to invest, while poorer areas may struggle to generate sufficient revenues. Any new system would therefore require an effective equalisation mechanism, transparent financial oversight and long-term national investment.

Lessons from the Previous Regional Policy

England has experimented with stronger regional institutions before. Until 2010, it had eight defined regions outside Greater London, supported by regional development agencies and government offices. According to the Guardian analysis, these agencies collectively leveraged an estimated £5.7 billion in private funding for business support and regeneration during their relatively short existence.

Their experience suggests that regional development requires more than transferring responsibilities. It requires institutions capable of coordinating government, councils, businesses, investors and communities over long periods.

Burnham’s proposed model is different. Rather than recreating the previous regional bureaucracy, it emphasizes asymmetric devolution and empowered city-regions. That could prove more flexible, but it also creates a risk of fragmented economic development unless a coherent national framework sets broad priorities.

The Missing Piece: A National Development Strategy

Perhaps the most important argument emerging from the analysis is that England lacks a sufficiently comprehensive national spatial and economic strategy. Scotland, Wales and Ireland have national development frameworks, while England does not have an equivalent long-term plan capable of determining how infrastructure, housing, energy, water, employment and industrial investment should be distributed geographically.

This matters because regional policy cannot operate in isolation. Housing policy affects labour mobility. Transport affects business investment. Energy availability influences industrial location. Universities shape innovation ecosystems. Water and electricity constraints increasingly influence where new housing and data centres can be built.

Without coordination between these policies, individual investment decisions can unintentionally reinforce the same regional imbalances that government says it wants to reduce.

A New Role for the State

The analysis therefore points toward a more active role for the British state. One proposal is the creation of a renewed national agency focused on neighbourhood regeneration and business support, working with local authorities and private-sector institutions and drawing on resources such as the Crown Estate and National Wealth Fund.

Such an institution could provide continuity beyond individual political cycles. Regional transformation requires decades rather than a single parliamentary term. It also requires professional expertise capable of identifying where public investment can unlock private-sector growth.

For Burnham, the political challenge will be to demonstrate that devolution is not simply the transfer of administrative responsibilities from London to local authorities. Successful devolution must transfer meaningful economic power, financial resources and decision-making capacity.

Conclusion

Burnham’s regional agenda is ambitious because it confronts a problem that has resisted successive governments: London’s exceptional economic strength can simultaneously benefit the United Kingdom while intensifying inequalities within it.

The answer is unlikely to be an attempt to weaken London artificially. Instead, Britain needs to create several powerful economic centres capable of generating investment, innovation and high-quality employment in their own right.

That requires long-term infrastructure planning, stronger regional institutions, targeted investment, fiscal devolution and a national development strategy for England. Burnham’s proposed reforms could provide the foundation for such a transformation, but their success will depend on whether the government can turn the rhetoric of regional empowerment into sustained economic capacity outside the capital.

The real test, therefore, is not whether Burnham can make London less successful. It is whether his government can make Manchester, Leeds, Birmingham, Newcastle, Liverpool, Bristol, Sheffield and other regional centres successful enough to challenge London’s gravitational pull.

That would constitute genuine economic rebalancing — not a redistribution of existing prosperity, but the creation of new centres of prosperity across England.