At the time of writing, it seems that Andy Burnham has been unsuccessful in his standoff with the government over the imposition of Tier 3 restrictions on large parts of the North West. Burnham had tried to use his devolved powers to support those on low incomes who are facing a loss of income as a result of the new restrictions – a cost that was estimated to run up to £90 million – and he was demanding that the government foot part of the bill. Until recently, the government was willing to offer up at least £60 million, though now the negotiations have failed Johnson was reportedly planning to give Manchester a third of that amount.

The dispute between the mayor of Greater Manchester – the most powerful of all the newly-created combined authorities – and the government represents one of the greatest upsets to the devolution agenda since it was revived under the coalition government. Since 2010, when ten councils in the North West applied to establish Greater Manchester Combined Authority (GMCA) – of which Andy Burnham is now mayor – successive governments have been attempting to create and empower new regional authorities with responsibilities over policy areas like transport, housing and planning.

A brainchild of George Osborne, the Tory devolution agenda was firmly grounded in mainstream economics. It relies on the idea of so-called ‘economies of agglomeration’: efficiencies created by the spatial clustering of industries – such as lower transport and labour search costs. Regional governance structures make it easier for local leaders to realise such efficiencies by allowing them to provide tax breaks to businesses, develop training schemes to boost skills and construct integrated regional transport networks.

Taken to extremes, this argument can have some concerning implications. After Osborne’s speech on the subject to Conservative Party Conference in 2015, The Economist argued that the Chancellor was seeking to rationalise the UK’s economic geography by ‘[letting] boomtowns boom and failing towns fail.’ This approach is based on the neoliberal idea that the geography of a country should be organised according to the needs of capital, rather than those of workers or communities.

This is the logic that underlay the Conservative’s ‘Northern Powerhouse’ agenda – and, in many ways, it’s worked. Since devolution, GMCA has presided over a huge housing boom that has seen skyscrapers constructed in place of affordable housing, forcing many residents out of the city centre. Devolution may have boosted growth, but most of that wealth has been captured by private landlords.

Despite this – or, given the importance of wealthy homeowners to the Conservative electoral coalition, perhaps because of it – Osborne views the devolution agenda as one of his great successes. And indeed, it does seem as though he had succeeded where previous Conservative administrations had failed: he managed to devolve powers to local and regional units of governance without creating a real counterweight to the power of Westminster.

It is true that without further powers over taxation and spending, regional authorities in the UK will continue to look more like one side of a public-private partnership than they powerful entities in their own right. But Burnham’s response to the pandemic reveals something the Conservatives probably didn’t consider: the powerful national platform devolution has given to a group of predominantly Labour mayors.

Mayors like Andy Burnham and Sadiq Khan could, if they used their influence, become serious thorns in the side of any Conservative government – not least one mishandling a crisis as severely as this one. Even if, like Burnham, they fail to win concessions from Westminster, with enough public support they could do serious political damage to central government by demonstrating that there is an alternative to their meagre economic policies.

Perhaps the best example of this – albeit on a smaller scale – is Preston council, which has spearheaded the idea of ‘community wealth building’ (CWB), which the CLES think tank describes as an approach to economic development that ‘redirects wealth back into the local economy, and places control and benefits into the hands of local people’. In other words, it is the exact opposite of the neoliberal outsourcing agenda that has dominated local councils for decades.

Preston council has worked with other ‘anchor institutions’ (institutions that can’t move, like NHS trusts and universities) to support local businesses, and even set up new co-operatively run firms that can bid for local contracts; and Matthew Brown, the leader of Preston council, has stated his intention to create a community-owned bank. The idea behind the CWB agenda is to socialise and democratise wealth in the local area – to make sure that everyone receives the gains of economic development, not just big business and landlords.

Pursuing such a model at the level of a combined authority the size of Greater Manchester would undoubtedly be much more challenging – not least because of the powerful vested interests that would stand in the way of the construction of a fairer and more equal economy. But the rewards would also be much greater.

Even if Burnham does not succeed in his fight against the government, he still has the opportunity to show that another way of organising the economy is possible. Supporting low-paid workers affected by the restrictions would be a good start. Extending the evictions ban – or even cancelling unpayable rents – and using the power of local procurement budgets to invest in something like a post-Covid Green New Deal for Greater Manchester would be even better.

In recent years, the British left has been focused on national electoral politics to the detriment of all else. Today, there is a growing consensus that we need to build power outside of Westminster – in the labour movement, in social movements and on the streets.

But we also need to influence politics at the local and regional level. That means piling pressure on Labour-led local and regional administrations to pursue progressive models like the one pioneered by Preston, rather than that pioneered by Serco. If the new metro mayors can be a thorn in the side of the government, the left must make sure it is a thorn in the side of the metro mayors.