Andy Burnham has launched a major government reorganization aimed at boosting the UK economy by centralizing key functions within a newly created prime minister’s department. The initiative, announced earlier this month, involves consolidating elements of the Cabinet Office, Treasury, and the housing ministry to establish a more powerful central driver of economic growth and local development.

At the heart of the reforms is the creation of the Office of the Prime Minister and Cabinet, headed by Louise Haigh, chancellor of the Duchy of Lancaster. This office will oversee both the existing No 10 operation in London and a new No 10 North office based in Manchester. The Manchester office will assume responsibility for local growth and devolution policies previously managed by the Treasury and the Ministry of Housing, Communities and Local Government. Burnham, who will work from Manchester at least one day a week, described the move as a shift of power away from Westminster to closer proximity with the regions, reflecting his commitment to regional empowerment. Civil servants are being offered relocation packages to encourage transfers to Manchester, underpinning the rapid implementation of the new structure.

Additional changes include the transfer of various functions across departments: the establishment of a new agency, OneGov, led by Cabinet Secretary Antonia Romeo, to manage HR functions such as pensions, recruitment, and security vetting; the realignment of the equality office under the housing ministry; digital ID responsibilities moving to the Department for Culture, Media and Sport; the public sector fraud authority shifting to the Department for Work and Pensions; and the investment security unit integrating into the Department for Business, Innovation, Science and Trade. The Department for Science, Innovation and Technology is being abolished, with AI oversight transferred to the Prime Minister’s Office along with a minister for artificial intelligence appointed to the cabinet.

In parallel, John Healey, newly appointed chancellor, faces the challenge of managing fiscal discipline while delivering on high-profile commitments including increased defence spending, expanded public ownership of utilities, council housebuilding, and NHS social care reforms. Healey is regarded as a unifying figure within the Labour Party, with a reputation for bridging internal divisions.

The government has stated the restructuring aims to create a stronger, more strategic center that empowers local leaders and drives economic growth nationwide. The Institute for Government welcomed the changes as addressing longstanding weaknesses in the government’s core.

However, Burnham’s reforms have generated some criticism. Concerns have emerged regarding the internal Labour Party dynamics following a recent cabinet reshuffle that saw the dismissal of eleven ministers perceived as loyal to former Prime Minister Keir Starmer. Critics within the party warned that the reshuffle deepened factional tensions, while Burnham defended the move as necessary to signal change to the public.

Economic pledges accompanying the reshuffle include plans to cut VAT on electricity bills, financed by the cancellation of a digital ID initiative, though the precise funding mechanism remains unclear. Opposition figures and some Labour MPs question the fiscal sustainability of these promises, pointing to the likelihood of future tax increases or spending cuts to cover the cost of expanded social and defence programs. Burnham has acknowledged the importance of clarifying budgetary plans and reprioritizing spending in upcoming fiscal statements.

Among the new appointments, Wes Streeting’s selection as defence secretary has been met with broad support from military circles despite his lack of armed forces experience. Former senior officers have praised Healey’s chancellorship as a positive step for advancing defence ambitions.

As these changes unfold, the government’s effort to rebalance power geographically and politically is set to be a defining feature of Burnham’s leadership.