Rewiring the State: Prime Minister sets out Government plans to drive growth and deliver on devolution from Whitehall

On 31 July 2026, the Cabinet Office published a statement, ‘Rewiring the State’, setting out the UK Government's plan to shift power, funding and accountability from Westminster and Whitehall to local elected mayors and combined authorities across England. The statement covered proposed changes to local growth and public services, local tax powers, and the institutions shaping and leading devolved and local government, alongside implications for the central government. A white paper with full details and an implementation timetable is expected in autumn 2026.

What the statement proposes

Implications for central government

What it could mean for technology and digital

Timeline

The government also committed to working with the Scottish, Welsh and Northern Irish governments to extend the principles of local empowerment across the UK, respecting devolved responsibilities. All mayors are due to meet with permanent secretaries, the Cabinet Secretary and local government chief executives in September 2026 to review progress.

Additional information was published on 21 and 23 August regarding devolution. On 21 August the Prime Minister announced that officials were to be seconded into Combined Authorities to support devolution including digital devolution. The announcement means five to ten civil servants will have the opportunity to do 6-9months working in a combined authority. Further techUK analysis on this can be found here.

On 23 August the Prime Minister announced new Mayoral planning powers that mean Mayors will have “call-in” powers to take over significant planning applications — directing councils to approve or refuse, or granting upfront permission without a developer application. This will be for schemes of 150+ homes; 15,000+ sqm of commercial space; or buildings 30 metres (c10 storeys) or taller. These powers put regional Mayors powers inline with the Mayor of London, including being able to levy developments to fund major infrastructure, modelled on the mechanisms used for the Elizabeth line. The new charge could run alongside local Community Infrastructure Levy and section 106 planning obligations, although Mayors and local authorities would have to consider each other’s rates when assessing a developments viability.

Analysis:

We should start by acknowledging that devolution isn’t new. It started in Scotand and Wales in 1999 and even in Greater Manchester since 2015. That said this is the most all-encompassing document from this Government on devolution and changing the governance and political landscape of the England, with the potential to change economic discussions and delivery.

techUK has long called for more clarity, details and timings to be confirmed and this statement from the Cabinet does just that and should be welcomed. And the indication from ‘devolution by default’ is encouraging in acknowledging that the central government doesn’t always have all the answers.

On fiscal devolution the document notes the UK Government will be “replacing grants from central government with a share of local income tax for every mayor, beginning in 2028, such that where a region grows its tax base”. The incentive of this for Mayors and regions being less reliant on Government grants, have more certainty in budget planning (rather than single year settlements) and investing in regions to grow the tax base to grow a regions own devolved budget in future.

This also has an added incentive for the Government toward localities delivering more housing (as it simultaneously reworks the National Planning Policy Framework). The Government has a target to build 1.5m homes across a 5 year period, by allowing regions to keep more of the income tax generated in a locality this should incentivise Mayors, MSAs and Council to build more homes. However, will this result in the homes that regions want or need e.g. bungalows/start homes vs executive housing.

On governance the change in accounting officers is worth highlighting given the increased powers and budget for Mayoral Strategic Authorities. This should seek to address some of the concern around spending, transparency and scrutiny. However the document is light on political scrutiny and notes “We will also ensure that there is a clear role for Members of Parliament in local accountability, working with mayors and local councillors” but there is little further information on this. Previously Andy Burnham has talked about the House of Lords becoming a Council or Senate of the Nations and Regions (previously proposed in the Brown Commission 2022). This statement doesn’t go that far and there would be greater debate required and far more detail needed for the UK to become a federal model like Germany.

Local Government Reorganisation is already underway in many areas and techUK’s LGR Hub has provided support and information on this work, as over 200 councils in 21 areas merge. This work already has an impact on data, service delivery, AI and digital transformation in local government and the latest devolution statement will only add this to and the pressures on those in local government.

On public services one important note is the aligning of ‘key public service’ boundaries, most notably policing, fire and integrated care boards (ICBs) by 2028, the logic being that it allows for a ‘place-based approach to budgeting’. Reasonably problems and the public don’t see (or stop) at some invisible arbitrary boundaries, however questions will be asked about the time, costs and resources required to deliver organisation changes.

On planning, techUK has previously called for Mayors to have more of an official role in the planning process as well as improved consistency across LPAs and have called for clarity on Mayors contribution to planning being factored into planning fees (see here). With potentially 18–20 MSAs each gaining more autonomy over both planning and digital capability-building, elements impacting tech and digital policy could diverge by region rather than being set centrally.

Politically, the Prime Minister and UK Government can only control so much. A great deal of the change comes into force after 2028 and there may well be a General Election at that time – so the proof of the success of economic success (and even completing organisational change) from devolution will be unclear. The political debate on devolution has already begun with early skirmishes as some Mayors set out their ambition to use devolved budgets to deliver tax cuts, while the UK Government seeks to confirm that funding cannot be used in this way. This allows some to questions the extent of ‘local control’, decision making and different approaches being taken vs. the local delivery of UK Government policy.

We look forward to seeing the white paper in the autumn and implication for the UK Government Budget on 28 October. The Prime Minister has set out ambitious plans to renovate the Government and like any re-wiring it can be time consuming and expensive, but done correctly can open new opportunities, new ways to live and work, and provide greater stability and certainty when planning for the future.

Nations and Regions Programme activities

techUK champions the tech sector throughout the UK. We work with local authorities, devolved government, and local and national policy makers to advocate for the tech sector in strengthening economic growth and resilience across the nations and regions. Visit the programme page here