The government has been making promises to give more power to cities and regions, and it’s time to follow through for the capital city.
Last week, the Council of the Regions and Nations had their first meeting, showing progress towards fulfilling the government’s devolution promises. A report from Labour Together also called for elected Mayors to have more authority and resources. It’s time to move beyond promises and take concrete actions that will help cities and regions grow and support the government’s ambitions for growth.
London, despite being a major contributor to the UK’s economy, has not received the same level of devolution as other cities. This has led to a decline in productivity and London now lags behind other global cities in this aspect. The impact of this is felt by Londoners of all backgrounds, with a significant portion living in poverty once housing costs are considered.
As we approach the 25th anniversary of the Mayor of London role, BusinessLDN, along with Primera and three Business Improvement Districts (BIDS), has released a report advocating for London to receive a devolution deal similar to those of Greater Manchester and the West Midlands. This move is crucial in empowering local authorities to address the unique challenges faced by residents and deliver tailored solutions.
The current centralised approach limits London’s ability to make decisions about its own future. London government only has control over a small percentage of the taxes raised in the city, with most financial decisions resting with the national government. This lack of fiscal autonomy hinders the city’s ability to address its diverse needs and invest in critical infrastructure.
Fiscal devolution would not only provide financial flexibility but also enable local government to address housing, transport, skills training, and other public service needs more effectively. By allowing local government to retain a greater portion of taxes generated within their jurisdictions, London can stimulate economic growth and improve the quality of life for its residents.
The report emphasizes that fiscal devolution is essential for addressing the housing crisis in London. Local governments need the freedom to implement targeted housing initiatives that meet the specific needs of different boroughs. London’s Business Improvement Districts have already shown the benefits of fiscal devolution by enhancing public spaces and services through additional levies on business rates.
In a time when economic growth is a top priority for the government and there is a need to improve democratic representation in local government, fiscal devolution can play a crucial role. The report serves as a reminder of the importance of taking concrete steps towards devolution for London to ensure the city can reach its full potential.