Power shift: how Andy Burnham’s plans for devolution could reshape the UK workforce

The future of work in the United Kingdom has been largely shaped by decisions made in Westminster and the gravitational pull of London. But Andy Burnham, the UK’s latest Prime Minister, has signalled that he’s prioritising a push for greater devolution, one in which regions have more power to shape their own economies, infrastructure and labour markets. For employers, that could influence not just where businesses invest, but where workers are based and what the workplace of the future looks like across the UK.

An organic framework

In most countries where devolution has worked well, the establishment of local structures came more organically. Germany grew out of mini-kingdoms; the United States started as a collection of its namesake. Despite the UK’s history as a similar patchwork of nations, it is among the most fiscally centralised countries in the more economically developed world.

The Centre for Cities estimates as little as 5% of tax revenue currently stays with local authorities, the rest travelling straight to Whitehall to be later allocated by the central government. In contrast, 14% of tax stays local in France and 22% in Japan. And, at present, the UK’s major provincial cities significantly underperform their peers found elsewhere within the G7; seven of the UK’s big-cities scoring in the bottom percentile for productivity amongst the collection of nations.

The UK’s regional urban developments are already home to the talent and ambition to drive essential growth, but often lack the investment needed to reach their full potential. Redistributing greater economic power could help unlock more substantial development beyond London.

Diversifying the talent pool

Better devolution could begin to alter the geography of hiring across the UK. With more investment and decision-making power moving to regional cities, local leaders are better able to shape skills and policies to keep their local pool of talent diverse. Regional hiring could become more attractive; helping employers access a wider range of skilled workers.

Better-funded skills programmes, improved transport links and closer collaboration between employers and local authorities could help address regional skills gaps and shorten the distance between businesses and the people they need.

Robert Walters recently forecasted that 90,000 London white-collar jobs will relocate to regional cities over the next five years in an article for the Times. The analysis predicts an approximate 22,500 of those jobs moving to Manchester and Liverpool, 18,000 to Birmingham, 13,500 to Yorkshire and the remainder spread across Bristol, Edinburgh, Glasglow, Cambridge, Newcastle, Cardiff, and Reading.

In contrast, a more devolved economy could make hiring much more distributed, reducing the traditional concentration of jobs and opportunities in London and the wider South East. Nonetheless, it would give major regional cities a much stronger role in the UK’s employment landscape.

But, relocation hasn’t always seen success. When the ONS shifted their offices from London to Wales, they saw 90% of their staff resign rather than relocate, leading to a huge loss of institutional expertise and a measurable slump in output, highlighted in a later review of the move. A similar story was found when the Bank of England closed its Moorgate office while continuing to grow its Leeds operation. With a target of 500 jobs in Leeds, the Financial Times reported that only around 100 of those positions had been filled, despite relocation incentives for London-based staff.

Hannah Keenan, the associate director for the Institute for Government, also analysed moves within the civil service. While only 21% of the civil service was based in London, closer to 66% of senior roles were still concentrated in the capital, highlighting a real challenge in moving decision-making to cities outside of London.

Does investment follow attention and political proximity?

Devolution could strengthen the case for investment beyond London, allowing the space for regional cities to bask in greater political visibility, influence and control over their own economic priorities. Political proximity may help drag regional opportunities higher up the agenda, but whether that translates into more capital, development and jobs, will depend on if investors follow that shift. If not, the economic pull of London may remain difficult to dislodge.

Anthony Breach, the director of research at the Centre for Cities explained the move could be more important symbolically, ‘it’s a signal to the wider business and policy-making communities that this [regional cities] is a place worth investing in, that we see talent and appeal in this place, that it’s worth us sticking our necks out and putting money in this particular place.’

An early indication of this shift is the British Business Bank’s new £150m Northern Scale-Up Fund, which will provide larger injections of investment of between £5m and £15m to high-growth businesses across the North of England. Designed to compliment the existing Northern Powerhouse Investment Fund II, the fund aims to attract additional private capital into some of the region’s most innovative and ambitious firms.

Does the geography of opportunity shift with the geography of power?

Greater devolution has the potential to shift where investment, jobs and business growth happen across the UK, giving major regional cities more influence over their economies. There are a few companies that are paving the way for a life outside of London.

Channel 4 is now headquartered in Leeds and the BBC’s MediaCity, home to 3,500 BBC staff, completed their move to Salford in 2012. Tens of thousands of civil-servant roles have already been moved out of the capital: HMRC now based in Newcastle; a major outpost of the Treasury situated in Darlington; the Ministry of Housing, Communities and Local Government setting their base in Wolverhampton, to name a few.

More recently, private-equity firm Hargreaves Lansdown moved to its new Bristol office and sent out a mandate for employees to work three day a week from the site by early 2027. And, digital services and AI company Agilisys relocated its national HQ from London to Wigan earlier this year, after almost three decades in the capital. The company itself said that the decision to move was driven by ‘the North West’s talent pool’ and existing relationships with public-sector organisations in the region; before moving their 300+ specialists to the region.

Ultimately, the success of devolution won’t be measured by how much power moves out of Westminster but by whether that power creates tangible opportunities for people and business across the country. If greater regional control can unlock investment, strengthen local talent and give businesses more reason to grow outside the traditional economic centres, it could begin to reshape the geography of work in the UK. And, as Andy Burnham aims toward ‘good growth in every postcode’ all eyes will be focused on whether that ambition can become reality.