Government must tackle the ‘English Question’ and devolve financial powers in England

Wednesday 09 Jul 2014 @ 13:10
Parliamentary Committees and Public Enquiries

With the Government eagerly handing greater economic freedom to Scotland and Wales, the Communities and Local Government (CLG) Committee has urged Ministers and general election manifesto writers to show the same enthusiasm for devolution elsewhere in the UK—by allowing local communities in England to take greater control over how money is raised and spent in their areas

In their new report, 'Devolution in England: the case for local government', the CLG Committee calls for the transfer of a range of tax raising powers to local authorities, including business rates, stamp duty, council tax and other smaller taxes and charges, along with greater flexibility to borrow for investment. Releasing groups of authorities in England—centred on large city and county regions—from the fiscal grip of Whitehall could, the Committee says, re-energise local democracy, boost England's economic performance and lead to more balanced growth across the country.

Comments from the Chair

Clive Betts MP, Chair of the Communities and Local Government Committee, said:

The Government should work with groups of local authorities, focused initially on England’s large cities, to break the log-jam stopping local areas from shaping their economic destiny. The public might well ask, when Scotland and Wales are being promised ever greater fiscal devolution, why not England? Devolving these powers is the next step on the path to genuine localism.

He added:

If the citizens of New York, Frankfurt and Tokyo can be trusted with tax-raising powers, why not the people of London, Greater Manchester or the north-east? Local areas know best how to stimulate their economies. With a wider range of revenue streams at their disposal, they would be able to invest in infrastructure and projects that mattered locally—without having to rely on or wait for handouts from central Government. Local people would then reap the rewards through increased tax take, which could be reinvested in their areas. In the same vein, if local politicians failed to deliver, they wouldn’t be able to hide behind Whitehall and Eric Pickles.

Despite gaining some responsibilities for spending through City Deals and limited control over business rates, England’s local authorities still have much less power than the Scottish Parliament and Welsh Assembly Government. The Committee therefore suggests the Government should develop a framework for devolution. With a cautious Treasury to consider, significant fiscal powers may go to only a few areas to begin with. But the rest of local government should not be left behind. The Committee argues that all local authorities in England should gain decentralised powers over spending and public services, and existing combined authorities should be able to take on a greater range of planning, housing and regeneration powers.

The Committee is clear that authorities taking on significant devolution will need to cover recognisable economic areas. No single governance model is recommended, but authorities should be transparent and publicly accountable. They should also be able to demonstrate fiscal competence and have clear and costed plans in place for their enhanced powers.

Clive Betts MP, Chair of the Communities and Local Government Committee, said:

Fiscal devolution in England is an idea whose moment has arrived. The starting point was the London Finance Commission (LFC) 2013 report, backed by the support of the 8 Core Cities. Now the Chancellor is arguing forcefully about the need to decentralise power to boost economic growth, while Lord Adonis’ review makes a powerful case for the devolution of more powers to local government. The time has come for Government to join with local authorities to push this agenda forward. Together they should work to establish a devolutionary framework which, while addressing need, offers clear incentives and benefits to authorities that take more control of tax and spending.

Channel website: http://www.parliament.uk/

Share this article

Latest News from
Parliamentary Committees and Public Enquiries

Government rejects Committee’s calls for increased parliamentary scrutiny of treaties

18/04/2024 13:05:00

The Public Administration and Constitutional Affairs Committee (PACAC) today publishes the Government’s response to its report on scrutiny of international treaties.

New select committee proposed to provide scrutiny of highly confidential spending

15/04/2024 13:05:00

The Public Accounts Committee (PAC) today calls for the establishment of a new select committee, to consider sound financial practice and value for money in sensitive areas which are outside the remit of the statutory Intelligence and Security Committee of Parliament.

Government should learn lessons from pandemic to improve communications and counter misinformation

12/04/2024 15:05:00

Scientists working across government should be allowed and encouraged to take on a wider public facing role in the media to combat the spread of misinformation, a report from MPs says today.

MPs call for copyright changes and new champion for freelancers to improve precarious pay and working conditions in creative industries

10/04/2024 13:05:00

Many successful musicians, actors, writers and visual artists are struggling to make a living due to gaps in copyright protection, a lack of support for freelancers and unpredictable returns from music streaming, MPs warn today.

Equity in cricket: ECB must closely monitor Yorkshire to ensure no return to ‘business as usual’, MPs say

05/04/2024 14:05:00

The ECB must closely monitor Yorkshire CCC to ensure there is no return to the ‘business as usual’ that allowed a culture of discrimination to take root and thrive at the club, MPs say today.

Government must clamp down on unregulated canine fertility clinics and unlicensed pet breeders, say MPs

05/04/2024 12:25:00

The EFRA Committee wants the Government to address the fact that more than half of the puppies entering the market come from unlicensed breeders, and is today calling for a list of licensed breeders to be made public, and a change in the licensing regulations so as to include breeders of two or more litters a year, in order to counter low welfare breeding practices and provide assurance to buyers.

Committee urges Government to hold aviation industry accountable for emissions reductions

04/04/2024 14:05:00

The Environmental Audit Committee has urged the Government to hold the aviation industry accountable for its proposed emissions reductions, as it publishes the Government’s response to its report on net zero aviation.

Shared ownership is failing to deliver an affordable route to homeownership, say MPs

28/03/2024 16:05:00

Shared ownership schemes are drastically failing to deliver an affordable route to homeownership for too many people and subject buyers to rising rents, uncapped service charges, and a disproportionate exposure to repair and maintenance costs, says the cross-party Levelling Up, Housing and Communities (LUHC) Committee in a report published today (Thursday).

MPs call for statutory sick pay reform to address inadequate financial support for workers most in need

28/03/2024 14:30:00

Statutory sick pay (SSP) is failing to provide enough support for those who most need financial help when ill and should be increased and made more widely available, MPs say today.

WIREDGOV