A stronger voice for Cambridgeshire and Peterborough - but devolution must now deliver

The designation of Cambridgeshire and Peterborough as an Established Mayoral Strategic Authority marks an important moment for the region. It places the Combined Authority in the top tier of English devolution, creating a route to wider powers, greater funding flexibility and a more direct relationship with Whitehall. But the significance of the announcement lies less in the new title than in what the region can now do with it.

Established status opens the door to an integrated settlement: a long-term block funding arrangement that brings together funding previously distributed through separate departmental programmes. Rather than repeatedly bidding into short-term national competitions, the Combined Authority should gain greater freedom to allocate resources across transport, housing, regeneration, skills and economic development according to local priorities.

It is important not to overstate what has already been secured. Much of what will be contained in the settlement must still be negotiated with Government. Nor does an integrated settlement necessarily mean a large injection of new money. Its immediate value lies in greater certainty, fewer funding silos and the ability to move resources between local priorities. That could nevertheless be transformative for Cambridgeshire and Peterborough. 

What it has lacked is sufficient control over the systems needed to turn that potential into broadly shared prosperity. Housing, water, transport, energy, skills and innovation have too often been treated as separate policy questions, controlled by different departments and funded through different programmes. Growth has therefore been constrained by the inability to plan and invest across these systems as a whole.

Established status offers an opportunity to change that. The Combined Authority could use a long-term settlement to connect transport investment with new housing, skills provision with inward investment, and innovation funding with the infrastructure needed to commercialise research and expand local businesses. The test will be whether it can turn a collection of devolved programmes into a single regional investment strategy.

This new status has been announced alongside the Government’s much wider ambition to “rewire the state”. The Cabinet Office statement of 31 July promises a major transfer of powers, resources and functions from Whitehall to elected mayors and local authorities. It adopts “devolution by default” as an operating principle: ministers will increasingly have to justify why powers should remain at the centre.

For Cambridgeshire and Peterborough, several proposals are particularly important. The Government intends to give mayors greater control over commuter rail and locally funded transport projects, stronger housing and regeneration powers, and a substantially increased share of later-stage innovation funding. It also wants mayors to establish Good Growth Funds capable of bringing together public financial institutions and local government pension investment.

These powers speak directly to the region’s needs. Better rail and bus connections are essential if more communities are to participate in Cambridge’s success. Housing growth cannot proceed without investment in water, energy, health services and transport. Innovation policy must do more than support research: it must help businesses commercialise ideas, scale up and retain more of their economic value within the region.

The Cabinet statement also proposes a much larger mayoral role in education and skills. This would include locally shaped technical and vocational pathways from the age of 14, mayoral control of the budget supporting technical and vocational education for 16–19-year-olds, and the integration of education, employment, health and youth support.

This goes considerably further than the existing devolution of adult skills funding. It could allow Cambridgeshire and Peterborough to develop coherent pathways from school and college into the region’s growth sectors, while addressing persistent shortages in construction, engineering, digital, health and social care. It could also strengthen the position of Peterborough and the Fens, where educational participation, skills levels and access to higher-value employment remain very different from those found around Cambridge.

ARU Peterborough demonstrates what determined local collaboration can achieve. The next stage should connect universities, FE colleges, independent training providers, schools and employers within a regional skills system - one that serves growing frontier industries but also provides routes into good work for communities that have not benefited sufficiently from previous growth.

Perhaps the most consequential proposal is fiscal devolution. From 2028, the Government intends to begin replacing central grants to mayoral authorities with a share of locally generated income-tax receipts, alongside greater retention of business rates. In principle, this would allow regions that create jobs and raise earnings to retain more of the resulting revenue and reinvest it in further growth.

This addresses a longstanding weakness in the present system. Cambridgeshire and Peterborough generates wealth and tax revenues of national importance, but local government captures too little of the return to fund the infrastructure on which continued growth depends. Fiscal devolution could create a virtuous circle in which investment in skills, transport and housing expands the tax base, with part of the increased revenue then retained for further investment.

The detail, however, will be critical. The initial transfer is intended to be fiscally neutral, so it should not be confused with an automatic funding increase. There must also be a robust system of equalisation. Cambridge’s strong tax base cannot be allowed to obscure the needs of Peterborough, Fenland and other communities, while regions with weaker economies must not be penalised for having fewer revenues to retain.

Established status therefore brings opportunity, but also greater responsibility. The Combined Authority will need the institutional capacity to appraise major investments, manage risk and demonstrate results. Its chief executive will become the local accounting officer, while the new system will place greater emphasis on transparent outcomes and place-based data. Devolution will work only if local authorities, businesses, universities, colleges and communities are genuine partners in setting priorities.

For the region the wider lesson is clear. The East of England needs strong regional institutions capable of making the case for investment and connecting its distinctive economies. Cambridgeshire and Peterborough cannot thrive in isolation from the rest of the East. Its labour markets, supply chains, transport corridors, research partnerships, water systems and energy infrastructure extend far beyond the Combined Authority’s boundaries.

Established status should therefore strengthen, rather than narrow, regional collaboration. It gives Cambridgeshire and Peterborough a more powerful platform from which to work with neighbouring authorities and make the case for strategic investment across the East.

The designation is an important first step. The prize is not simply more power for another tier of government. It is the ability to turn the wealth created in Cambridgeshire and Peterborough into better infrastructure, wider opportunity and stronger communities - and to ensure that the success of Cambridge helps drive prosperity across the whole region.