ADD2023 London Finance Commission 2

Type of decision: 
Assistant Director's decision
Code: 
ADD2023
Date signed: 
18 October 2016
Decision by: 
Jeff Jacobs, Head of Paid Service

Executive summary

The Mayor of London has re-formed the London Finance Commission to review, refresh and revise its original recommendations in light of the changed circumstances, following the UK’s vote to leave the European Union.
In order to provide a comprehensive report, the LFC requires a budget to commission research and surveys, hold open evidence hearings, publish and print a final report, as well as meet other costs as they arise in the course of the Commission’s work.
It is estimated that the total budget, including contingency will be £50,000. The single largest area of expenditure is commissioning an updated version of the working paper ‘International Comparison of Global City Financing’, originally completed in January 2013 and which formed a vital part of the Commission’s final report for stronger fiscal powers for London government. This will cost £15,000 in total.
Part of its review will include comparing London with other cities outside the UK. It will assess the range of fiscal powers these cities control and compare this with London’s. The updated paper will ensure the LFC’s evidence is current in making further recommendations to government.
For this part of the budget we are seeking an exemption from the GLA’s Contracts and Funding Code which requires the GLA to call off the services required from an accessible framework or conduct an advertised tender for the services required because our supplier (University of Toronto) were integral to completing the initial working paper in May 2013 and the continuation of existing work in making further recommendations to government is vital and cannot be separated from the reconvened London Finance Commission. The supplier is unique in its ability to provide specialist knowledge that builds upon their previous research within the tight deadlines that the research is required in.
 

Decision

That the Head of Paid Service approves:

1.    A total budget of £50,000 to allow the London Finance Commission to complete its work
2.    Within the total budget, an expenditure of £15,000 to commission the University of Toronto (Institute of Municipal Finance and Governance) to update the International Comparison of Global Financing paper.
a.    The decision to use an exemption from the GLA’s Contracts and Funding Code due to the supplier’s previous involvement in this project
b.    The decision to enter into a contract with the University of Toronto for the update of the International Comparison of Global Financing Paper
 

Part 1: Non-confidential facts and advice

Introduction and background

The Mayor of London has re-formed the London Finance Commission to review, refresh and revise its original recommendations in the light of changed circumstances; in particular the referendum vote to leave the EU, the Mayor’s new priorities, and the progress on devolution that has been made since the 2013 Raising the Capital report. As before, the Commission is to help the Mayor and London’s local authorities improve the tax and public spending arrangements for London in order to promote jobs, growth and greater equality. He wants the Commission to examine the potential for greater devolution of both taxation and the control of public expenditure (capital and revenue) to achieve this goal. 

 

Objectives and expected outcomes

The reconvened LFC will assess the additional powers London needs in light of the change circumstances following the vote to leave the European Union and progress on devolution since the Commission’s original report, Raising the Capital (May 2013). The key objective is the publication of the Commissioners findings through a published report to make a robust case to Government for greater fiscal powers. In order to achieve this outcome and to conduct a robust Commission, the following will need to be completed:

•    The Commission to hold four public hearings in Manchester, Birmingham and London (x2).
•    Conduct a survey of Londoners 
•    The Chair of the Commission, Professor Tony Travers, to write - with support of fellow Commissioners - the findings of their research and deliberations.  
•    Design and printing of the final report
•    Commission the University of Toronto to update the International Comparison of Global Financing paper.

In relation to the University of Toronto, part of its review will include comparing London with other cities outside the UK. It will assess the range of fiscal powers these cities control and compare this with London’s. The updated paper will ensure the LFC’s evidence is current in making further recommendations to government.

Specifically, we are asking the University of Toronto to complete the following work:

•    Updates to Tables 1, 4, and 5 in the body of the paper, population figures in Appendix A, and all tables in Appendix B. These tables relate to international comparisons of operating expenditures and taxes per Capita; Distribution of Own-Source Revenues and Structure and Governance of other Cities.

•    A scan of the policy context in all seven cities to investigate whether relevant new policies or policy changes have occurred since the paper was published in 2013.

•    Update to the literature review presented throughout the paper, and the inclusion of more recent studies and reports.
 

Equality comments

Officers confirm that there are no adverse implications under the public sector equality duty in relation to the commissioning of the activities described above. 

 

Other considerations

a)    Key Risks and Issues 

i)    We are seeking an exemption from the GLA’s Contracts and Funding Code because our supplier (University of Toronto) completed the initial working paper in May 2013 and continuation of existing work, giving them unique experience and expertise in this area. For this reason, the only option is to commission the work from this organisation.

b)    Links to strategies and Mayoral and corporate priorities:

i)    The work of the London Finance Commission is supported by its aim to promote jobs and growth through financial devolution. Its terms of reference state that the Commission will ‘help the Mayor and London’s local authorities improve the tax and public spending arrangements for London in order to promote jobs, growth and greater equality’

ii)    The Commission was reconvened in response to the following Mayoral manifesto commitments to: ‘work with the alliance of all those who want to get London building to secure the best deal for London from the national government, arguing for more devolution to London’.

iii)    The research that is being procured forms a vital part of the Commission’s work.

c)    Impact assessments and Consultations.

i)    An impact assessment or consultation is not considered necessary because the decision to engage the University of Toronto fits within one of the exemptions to the GLA’s Contracts and Funding Code.
 

Financial comments

Approval is being sought to commit expenditure of up to £50,000 to allow the London Finance Commission to complete its outstanding work. £15,000 will be allocated to the commissioning of the updated version of the working paper ‘International Comparison of Global City Financing’, and the remainder is being used to meet costs incurred in the course of the Commission’s work, as outlined in the body of the report

This will be contained within the 2016/17 Corporate Contingency Budget. Any changes to this proposal will be subject to the Authority’s decision making process. All appropriate budget adjustments will be made. 
 

Planned delivery approach and next steps

Activity

Timeline

Commission research

ASAP

Final public hearing to take place

21 Oct 2016

Full report completed by the University of Toronto

22 October 2016

Commissioners to discuss report

24 November 2016