'Council tax hike' warning over Lancashire mayor amid row over benefits of the role

The leader of Lancashire County Council says he will not agree to a directly-elected Lancashire mayor until the government sets out exactly what the financial benefits may be - including whether a council tax hike would be required to fund the role.

Stephen Atkinson was speaking after Andy Burnham announced last week that areas with a metro mayor would be allowed to keep a share of any growth in income tax and business rates raised in their patch.

However, County Hall’s Reform UK leader told the Lancashire Post that unless government funding is provided for the cost of running a Lancashire mayoralty, the post-holder would have to add a charge to council tax bills.

He said he will be writing to ministers seeking clarity on that issue and others - adding to a list of stipulations upon which the Lancashire Combined County Authority (LCCA) has already said its support for a mayor would depend.

But the Labour MP for Ribble Valley has warned that the county needs to sign up for a mayor now - before it becomes the only place in the North of England without one as of next May.

Maya Ellis said negotiations over terms should come after Lancashire has made the mayoral commitment that it has conspicuously failed to do in the decade since devolution deals between the government and local areas across the country started to take effect.

The Prime Minister’s push to expand and extend devolved powers across England comes as Lancashire’s own devolution journey hovers in limbo.

The LCCA - established in February 2025 to oversee the implementation of Lancashire’s first, long-awaited and mayor-free devolution deal - is currently awaiting a meeting with the government over the mayoral issue. But the gathering has been cancelled twice since March by the Ministry of Housing, Communities and Local Government [MHCLG] - and the Post can reveal there is still no date in the diary for it.

The discussion had been due to revolve around a series of requests regarding funding and timing previously made by the trio of council leaders that would have been in attendance – County Cllr Atkinson, a mayoral sceptic, and the pro-mayor Labour leaders of Blackpool and Blackburn with Darwen councils, Lynn Williams and Phil Riley.

County Cllr Atkinson says Andy Burnham’s announcement has now raised more questions that need to be answered before a mayoral deal can be considered.

“First of all, there is no capacity funding to run a mayoral authority at this moment in time, so that would mean we would have to raise a council tax precept,” he claimed.

He said the cost of running such an authority would be about “£5m a year, minimum”, adding: “But if you wanted to do a lot of things, like Manchester does, that rises to many tens of millions.”

Mayor-led combined authorities are not obliged to levy a council tax charge on residents - and during the current financial year, only four out of the 12 in existence outside London did so. The average additional cost to a Band D property was £89 for 2026/27, a 3.8 percent increase compared to last year, according to MHCLG figures.

The Band D percept charged by the Greater Manchester Combined Authority - which Mr. Burnham led until becoming PM - is £153, but the majority of that is the levy for the area’s fire service, which accounts for £92 of the total.

Combined authorities run by mayors received between £2.2m and £2.8m in capacity funding to cover their operating costs this year, whereas Lancashire’s non-mayoral combined county authority was handed just £250k.

County Cllr Atkinson also questioned whether the promised income tax and business rates retention might lead to a cut in Whitehall grants for Lancashire to offset the proposed arrangement.

“These are all real questions, because the state of the [nation’s] finances is so bad, I don't know how the government can afford - if they're not going to raise income tax - to give additional income tax receipts to local mayors without reducing grant funding.

“We need to see the details - and it looks like they're not going to reveal them until the budget. We will not go any further with this until we understand what the funding is and whether it's going to cost Lancashire residents more money without any reward.

“The idea that you just give the government a blank cheque and you don't ask [any] questions is a dereliction of duty, in my opinion,” he added.

However, Maya Ellis said Lancashire - which has displayed a longstanding collective recalcitrance over a mayor, always moving at the speed of the most reluctant council leaders, even though many have been in favour of the role - is now “not in a position to be negotiating with government over the terms”.

“They’ve been clear on the offer - we need to move towards it as fast as possible. We should be doing everything we can to get a mayor in place,” the MP told the Post.

As constituent members of the LCCA, Cllrs Atkinson, Williams and Riley wrote to the government late last year stating their willingness to “explore the principle of Mayoral devolution” - and so deepening the existing agreement.

However, the correspondence stressed that their approach was “contingent” on the government confirming certain "assumptions" regarding the cash that would be on offer as part of a fresh deal and the "timescales" for its implementation.

These included a ministerial commitment to the precise value of a 30-year mayoral ‘investment fund’ for Lancashire - with the presumption being it would be around “£36m per annum”, in line similar devolution arrangements elsewhere.

The letter also made the case for releasing half of the initial tranches of that fund to Lancashire before any mayor is actually installed, based on an assumption that the figurehead would not be elected before a separate overhaul of Lancashire’s councils is completed in April 2028.

Ms. Ellis - whose Ribble Valley constituency covers parts of Preston and South Ribble - says while she, too, wants to see an "interim [financial] settlement” for Lancashire ahead of a mayor beginning work, she believes it is a discussion to be had after signing on the dotted line.

“I understand why they might want to [try to secure an agreement upfront], but I think they have lost that luxury - because positioning it like that suggests they are in the driving seat of this.

“I think what they should be saying is, ‘We'll sign for a mayor, we're committed’ - and then after that, working with MPs to say, ‘Okay, we've signed - the sensible thing to do now is give us an interim settlement…so that we can start [work].

“Ultimately, it’s not the fault of our people and our places that different administrations locally have chosen not to push devolution at the earliest opportunity,” she added.

In order for any letter outlining County Cllr Atkinson’s concerns about the government’s latest devolution push to be sent under the LCCA umbrella, it would also have to be jointly signed by Cllrs Williams and Riley. The Post understands that no co-signed correspondence has yet been issued.

Speaking after the Prime Minister’s devolution ambitions were unveiled on Friday, Blackpool's Cllr Williams said: “Lancashire needs a mayor. It needs the powers and funding so that every corner of Lancashire can grow its economy, create quality housing for people, move people around easily and make people’s lives better.

“Currently Lancashire is being left behind and previous announcements have devolved billions of pounds and powers to Greater Manchester, Liverpool, West Yorkshire and other mayoral areas, but not Lancashire.

“It’s unlikely we’ll get that mayor before 2028, but [Blackpool Council is] working alongside the Lancashire Combined County Authority to ask the government to give us those powers and that funding even sooner so we can start making a big difference now.”

Cllr Riley - who last year told the Post it would be “insane for Lancashire to end up being the only place in the North of England that doesn’t have a mayoral authority” - said the county will “continue to lose out” on devolved powers like the income tax and business rates plan until it does something to ”fix” the issue.

Meanwhile, a spokesperson for the LCCA said: “We have noted the government's Blueprint Devolution Statement and will consider the implications for Lancashire once further detail becomes available.

“Our focus remains on working with government and partners to secure the best possible outcomes for Lancashire's residents, communities and businesses."

How soon is now?

Following the government’s devolution announcement, Azhar Ali - the leader of the Progressive Lancashire official opposition group on Lancashire County Council - said he would be writing to the LCCA’s constituent members to call on them to press the government to hold an election for a Lancashire mayor in May 2027.

He last month told a Lancashire County Council debate about speeding up devolution that the county had been “left behind by Greater Manchester, Merseyside and West Yorkshire”.

Labour group leader Mark Clifford, who had brought the motion being discussed - a modified version of which was passed, calling for a “cross-party delegation” to meet with the government “to pursue greater powers and funding for Lancashire” - said at the meeting: “Whether one agrees with every decision made there or not, it is difficult to argue that Greater Manchester has not benefited from having powers and influence that were previously held in Whitehall.”

Speaking to the Post after Andy Burnham's statement, County Cllr Clifford said he would “love there to be a Lancashire mayoral election in 2027”.

However, Liberal Democrat group leader John Potter - while in favour of a mayor - disagreed with holding a poll for the post next year, because of already scheduled elections for so-called ‘shadow’ versions of the four new councils that will cover Lancashire from 2028.

“The idea of putting a mayoralty [election] on top would be absolute chaos,” County Cllr Potter said in the chamber at County hall.

Responding specifically to Andy Burnham’s income tax and business rates retention pledge, the Lib Dems’ Lancashire finance spokesperson, Mark Jewell, told the Post: “We will have to see the devil in the detail. However, I broadly welcome this announcement to devolve powers to local government.

“I hope this does not mean just decentralisation or only to those areas with a mayor. Devolution will have to come with new money and no ties. If that is from income tax and business rates there will need to be some form of redistribution to poorer areas to support better and fairer growth across all areas of Lancashire.”

The Post also approached Conservative and Green Party groups at County Hall for comment on the issue.

Who’s got the power?

The government’s attempt last week to put mayoral devolution on the radar of those areas currently without it, saw a raft of powers promised as part of any future deals.

As well as the ability to keep a share of any increase in income tax and business rates, mayors will also get control over “large local transport schemes” and funding for 16-19-year-olds, along with the freedom to “build more homes where they’re needed”.

However, even without a mayor, Lancashire already has a degree of devolved power - including some of that now being alluded to as the preserve of mayors. It was secured via what was called a ‘level 2’ deal with the previous Conservative government three years ago - as opposed to the ‘level 3’ version that came with a mayoral figurehead.

It is not yet clear whether - and how far - the dividing line between those two arrangements will change as part of the PM’s self-proclaimed devolution revolution.

The main difference remains the availability of extra, locally-controlled funding. Whilst mayoral areas get an annual investment pot in excess of £30m a year for three decades, Lancashire was given a one-off £20m to create an innovation fund.

However, the county's current devolution arrangements mean it has almost two dozen local powers - including control over the adult skills fund, some compulsory purchase powers and responsibility for a local transport plan.

First Secretary of State Louise Haigh mistakenly said during an interview on Radio 4’s Today programme on Friday that the income tax and business rate powers would also be open to non-mayoral areas, but MHCLG later told the Post that was not the case.

Separately, Andy Burnham said of the wider devolution plans: ”I know what it’s like to be ignored by politicians in Westminster. I’m not going to make that same mistake now I’m PM.

“The whole of government will now pull together behind the people and places that desperately need our support. This is how we’ll bring back hope and bring power home to you.”