HAPPY NEW YEAR? 2025: Promise or control? 2026: Reality or opportunity?

After a turbulent year for Keir Starmer, which tested Labour’s commitment to devolving real power, Gill Morris goes back to the future and gives some predictions on where devolved power might land in 2026.

Is devolution the gamechanger for Starmer?

2025 was probably the year when devolution met reality. Labour pressed the button to put in place the boldest framework for regional power England has ever seen in the form of the English Devolution and Community Empowerment Bill. But something funny happened in 2025; populism surged, fiscal control tightened, and Reform UK began winning mayoralties and councils previously out of reach. Did 2025 mark the end or beginning of a new era of devolution?

In 2026, devolution will either mature into a resilient constitutional settlement — capable of surviving political volatility — or be curtailed by a central controlled experiment where there are winners and losers in the regeneration game.  The stakes are high for Starmer.

The honeymoon is over…

Labour’s 2024 landslide seemed invincible. In reality, there was no honeymoon for Starmer. But in 2025 we experienced a year of aftershocks and incredulity over what was (wasn’t) happening to deliver the doorstep promises of stability and change. 2025 saw rapid fragmentation and oodles of caution. As a result, Reform UK’s rise in popularity is no longer a sideshow — rather it is the political stage where we have to operate.

And yet, 2025 was also the year devolution became the real deal. As the English Devolution and Community Empowerment Bill heads to the statute book, without much of a fanfare, we will see huge and fundamental structural change in how we are governed. This could and should be something - real change -  Starmer can shout about but 2025 also exposed a deeper truth: devolution is no longer just about empowering places — it is about managing political risk.

There may be trouble ahead

The 2025 Spring Statement set the tone. Capital spending was announced. Welfare reform unravelled. Fiscal headroom vanished. Mayors were promised autonomy while being reminded, bluntly, who still controls the purse strings.

This tension between the centre and devolving power to largely unaccountable Mayors defines the current model: responsibility is devolved, but risk is localised. When things go wrong, which they innevitably will, it will be Mayors who carry the can, even though the Treasury still constrains what they do.

In 2026, we can expect tensions to harden between local, regional and national political leaders. The going will get tough. The next phase of devolved power will not see polite negotiation but more fiscal confrontation.

Passing the Reform UK Stress Test

May 2025 changed the character of English devolution. Reform UK did not just win councils; it won mayoralties. This matters because the system was designed on an assumption — rarely stated, but deeply held — that Mayors would broadly share Westminster’s objectives and deliver place based regeneration = CHANGE.

That assumption is now gone.

In 2026, Reform UK Mayors will test the limits of the system. Some will discover quickly that governing is harder than campaigning. Others will use their mayoral platforms to amplify grievance, not resolve it. Westminster will face a choice: respect devolved mandates however uncomfortable, or quietly reassert control.

Given the state of the polls, May 2026 is sending shock waves of anxiety in both major political parties. The prospect of Reform taking control and taking power in heartlands presents a political conundrum to say the least. The May local elections combined with further devolution to come should put fire in any politician's belly. But it feels like both leaders are sleep walking into an abyss. Devolution could be the solution but the comms are failing and voters are not getting the message that devolution and empowerment is good news.

The Devo Bill is a work in progress

The Devo Bill is ambitious, overdue and welcome. We really should be more excited about it. It simplifies governance, removes vetoes, and forces long-delayed unitary reform. But it ducks three fundamental questions that will not stay ducked in 2026.

First: money.
Without serious fiscal devolution, Mayors remain dependent on Treasury favour. Expect 2026 to bring louder calls for local tax powers — and louder resistance from the centre.

Second: accountability.
Power is being concentrated faster than scrutiny is being designed. A scandal involving a Mayor is not a question of if, but when. When it happens, the absence of robust checks is potentially political dynamite.

Third: purpose.
The Bill is heavy on structure, light on place. Culture, identity, and civic power remain marginal. In 2026, regions that succeed will be those that go beyond the framework and build legitimacy from the ground up — regardless of whether Westminster encourages it.

NPR - the real Litmus test?

We need BIG infrastructure to happen. Northern Powerhouse Rail tells the real story. A disconnected North is not good for the country. Places and regions without connectivity cannot deliver growth, fairness or opportunity. Delaying NPR into 2026 was not just a transport decision; it was a political signal.

Here is the prediction: if NPR slips again, devolution in the North will enter a legitimacy crisis. Not a policy crisis — a trust crisis. The North and the country should feel let down. Structures without delivery become symbols of failure, and symbols are the currency of populism.

3 predictions for 2026

1. Devolution becomes more political, not less.
   Expect open clashes between Mayors and Whitehall — over funding, priorities, further power and accountability

2. Populist Mayors will either moderate or implode.
   Metro Mayors may say many popular things and lean into promising things beyond their powers - they can’t do much about ‘small boats’ for example.  The gap between rhetoric and delivery will be stark. Some Mayors will adapt and continue to do things differently in line with the powers they have - using their soft powers to convene to deliver growth and investment. Others will fail.

3. Fiscal reform becomes unavoidable.
   Keeping hold of the purse strings is not sustainable if we are to reform or devolution stalls under the weight of expectation.

Where will Starmer land?

2026 is not about whether devolution continues. IT WILL. The question is WHAT kind of devolution England ends up with?

A resilient settlement — capable of surviving political disagreement, electoral volatility and uncomfortable winners — or a tightly managed system that works only when Westminster likes the outcomes.

The danger is the long grass. Delay infrastructure, defer fiscal reform, postpone accountability — and grievance and unhealthy competition will grow faster than growth.

But there is still a path forward. Align power with money. Match autonomy with accountability. Invest visibly in connectivity. Do that, and devolution becomes the antidote to fragmentation, not its casualty.

The year devolution met reality does not have to become the decade it lost its nerve.