Prime Minister Andy Burnham has launched a high-stakes restructuring of the British government, stripping the Treasury of its traditional control over economic growth policy to empower a new executive department based in Manchester. The move represents a fundamental shift in the architecture of Whitehall, aiming to break what critics describe as a decades-long "stranglehold" by the finance ministry over long-term national investment. By establishing "No 10 North," Burnham is attempting to centralize the "growth mission" within the Prime Minister’s own office, signaling a departure from the fiscal conservatism that has defined British economic strategy for generations.
The decision to relocate the center of economic gravity away from London’s Downing Street and toward the industrial heartlands of the North is the centerpiece of Burnham’s domestic agenda. The new department is tasked with coordinating housing, education, planning, and infrastructure—levers of growth that were previously scattered across various ministries or stifled by Treasury spending constraints. This administrative overhaul is designed to bypass the institutional caution of the Treasury, which Burnham and his allies argue has prioritized short-term debt reduction over the massive capital investment required to revitalize the UK economy.
Taming the Treasury to Boost Growth through No 10 North
The establishment of No 10 North in Manchester is overseen by Louise Haigh, a key Cabinet ally and the Prime Minister’s handpicked lead for the growth mission. Haigh has been a vocal critic of "Treasury brain," a term used by reformers to describe an ingrained culture of penny-pinching and risk aversion. In recent policy papers, Haigh argued that the Treasury’s dual mandate of controlling public finances while simultaneously trying to spur growth often leads to a default position of austerity. By separating these functions, the Burnham administration hopes to create a dedicated space for "fresh thinking" that is not immediately curtailed by the finance ministry’s veto power.
This structural change is more than a mere change of scenery; it is an attempt to resolve a power struggle that has plagued British prime ministers for over half a century. From Margaret Thatcher’s disputes with Nigel Lawson to the legendary friction between Tony Blair and Gordon Brown, the Treasury has frequently acted as a "government within a government." Burnham’s strategy harks back to the 1960s and the Wilson administration’s attempt to create a Department for Economic Affairs (DEA). While that experiment eventually failed, Burnham believes the modern era of regional devolution provides a more stable foundation for such an ambitious reorganization.
Historical Precedents and the Department for Economic Affairs
The historical analogy to Harold Wilson’s DEA is one that Burnham himself has embraced. In 1964, Wilson created the DEA to formulate a "National Plan" for the economy, aiming to produce more wealth internally and reduce the nation’s reliance on international finance. The DEA was intended to be a counterweight to the Treasury, but it was ultimately undermined by internal rivalries and the Treasury’s control over the actual purse strings. By 1969, the DEA was abolished, and its powers were reabsorbed by the finance ministry.
Whitehall veterans warn that Burnham faces many of the same obstacles that defeated Wilson. The Treasury’s power is not merely a matter of tradition; it is rooted in its legal authority over taxation and public expenditure. Even as Burnham moves the growth policy team to Manchester, the Treasury in London retains the ability to block funding for specific projects. The success of No 10 North will depend on whether it can command the same level of bureaucratic loyalty and intellectual authority as the institution it is meant to challenge.
Confronting the Institutional "Treasury Brain"
A significant portion of the political pressure driving this change comes from within the Labour Party itself. Many lawmakers viewed the previous administration’s decisions—such as slashing winter fuel allowances or softening taxes on banking windfalls—as evidence of the Treasury’s "baleful influence." These moves were seen as prioritizing the demands of the City of London and international bond markets over the needs of working-class voters. Burnham’s "growth mission" is an explicit attempt to pivot away from this model toward a more interventionist, regionally focused economic policy.
To support this transition, the Treasury has "lent" a small number of staff to the Manchester unit. Additionally, Beth Russell, a senior civil servant who was instrumental in creating the Treasury’s own Northern outpost in Darlington, has been working closely with the Manchester team. However, critics point out that the resources currently allocated to No 10 North are modest compared to the vast machinery of the Treasury. The appointment of former journalist Sam Lister as the director of No 10 North suggests a focus on communications and political strategy, but the department will need deep technical expertise to win policy battles against the finance ministry’s economists.
Devolution as a Catalyst for National Economic Expansion
Central to Burnham’s plan is the belief that growth cannot be managed solely from London. The Prime Minister’s route to economic renewal runs through radical devolution, handing unprecedented powers to metro mayors and regional authorities. This approach aims to bring together growth policies that are currently fragmented across the Whitehall system. By empowering local leaders to make decisions on transportation, vocational training, and land use, the government hopes to create a more responsive and efficient economic framework.
Ruth Curtice, director of the Resolution Foundation, noted that the Treasury does not "own all the levers" of growth. She argued that coordinating these disparate policy areas could be the most effective use of the new Manchester-based unit. If No 10 North can successfully act as a bridge between central government and regional mayors, it may be able to unlock "blockages" in the system that have historically stalled major infrastructure projects. This collaborative model is a far cry from the top-down directives that have characterized British governance for decades.
Challenges to the Authority of No 10 North
Despite the optimism in Manchester, skepticism remains high in London. Former Conservative chief secretary to the Treasury David Gauke argues that the Treasury will inevitably remain the most important department because of its control over the budget. Gauke suggested that stripping the growth remit from the Treasury might actually backfire, causing the finance ministry to focus even more narrowly on cost-cutting and fiscal discipline. "The Treasury is always going to be the most important department," Gauke stated, questioning how much influence a satellite office in Manchester can truly exert.
Furthermore, there are concerns about the practicalities of governance. If the Prime Minister is based in London and the growth department is in Manchester, the physical distance could lead to a lack of "face-time" and diminished access to key decision-makers. Historical evidence suggests that departments located away from the center of power often struggle to maintain their relevance. To counter this, Burnham has pledged to spend significant time in the Manchester office, but the day-to-day realities of international diplomacy and parliamentary business may make this difficult to sustain.
Navigating the Fiscal Future and Radical Policy Reform
The ultimate test for No 10 North will come with the upcoming budget. The Burnham administration is facing a series of critical choices regarding tax and spend, as well as the future of the privatized water industry and the long-delayed reform of social care. In his bid for leadership, Burnham hinted at a radical agenda, including large-scale renationalization of public utilities and significant tax reforms. These policies are likely to trigger intense pushback from the Treasury’s institutional core.
Jonathan Portes, a professor at King’s College London and a former government economist, highlighted the potential for policy clashes. "What happens when No 10 wants to do something, and Treasury says no?" Portes asked. Historically, the Treasury has responded to powerful Prime Ministers by paying "lip service" to their goals while quietly withholding the necessary funding. For Burnham to succeed, he will need to ensure that the Bank of England, the Office for Budget Responsibility, and the Treasury are all "pulling in the same direction," as suggested by Hannah Peaker of the New Economics Foundation.
As the new cabinet beds in, the eyes of the nation are on Manchester. The creation of No 10 North is a bold experiment in constitutional and economic reform. If Burnham can successfully tame the power of the Treasury, he may finally unlock the regional growth that has eluded his predecessors. If he fails, No 10 North may go the way of the DEA—a footnote in history that serves as a reminder of the Treasury’s enduring and inescapable dominance over the British state.
