Leaders of London and the UK's core cities vow to drive forward devolution to achieve greater freedoms for jobs and growth

20 November 2014

Leaders of London and the UK's core cities vow to drive forward devolution to achieve greater freedoms for jobs and growth

The mayors and leaders of the UK's most successful cities today (Thursday) met in London’s City Hall to mark the success of their City Centred Campaign and vowed to keep pushing the Government for more devolved powers.

It is now just over a year since London and England's other leading economic cities united to call for greater financial and fiscal control and devolution of public services, starting with the devolution of property taxes, under the banner of the City Centred campaign. Since then Glasgow and Cardiff have joined the Core Cities making it a UK-wide movement for change.

The campaign has seen events take place across the country, including all three main party conferences, making sure the issue of city devolution stayed high on the local and national agenda. A number of high profile, expert reports – including the RSA City Growth Commission chaired by Jim O’Neill and the CLG Select Committee Inquiry into fiscal devolution - have argued the case for a devolution-first approach concluding that what is done best at city level should be devolved. The City Centred campaign believes cities are best placed to make the most of local control over policies and funding for functions like transport, skills and housing – this will provide a stronger financial base to take long term investment decisions to boost jobs and growth.

Since the campaign began there has been significant progress on devolution to cities. Growth Deals have been signed across the Core Cities, a ‘devolution deal’ has been agreed for Greater Manchester which will have an elected Mayor in 2017, the Chancellor has committed to the One North project, Midlands Connect has been promoted, and further agreements on devolved powers are in the pipeline.

Sir Richard Leese, Leader of Manchester City Council and chair of Core Cities UK, said: ‘One year on from the launch of City Centred the devolution landscape changed beyond recognition. We've made great strides forward and there is much to celebrate, but there is still a lot to do. Report after report has argued the case for going further, backed by evidence, including the RSA City Growth Commission chaired by Jim O’Neill and the CLG Select Committee Inquiry into fiscal devolution. As well as more local control over policies and funding for functions like transport, skills and housing, we must look seriously at the devolution of taxes, starting with property tax.

‘Cities should keep more of the money they raise locally so it can be spent on priorities set locally to create jobs and improve lives. The evidence shows that cities with more control over taxes do better economically, but even with the progress we have seen, the UK is still one of the most centralised states in the developed world. Devolution should apply to all our Great British cities, across UK borders, because it is cities that drive growth for nations, not the other way around. Going forward we need a clear process devolution, bottom up, locally driven, but which goes at the speed of the fastest, not the slowest.’ The Mayor of London, Boris Johnson, said: 'Now is the time to unleash a new era of civic leadership by giving larger cities greater control over how they spend a modest proportion of the money they raise. This is not about asking for more money, instead it is a tried and tested formula applied successfully in other leading world cities.

'Devolving property taxes to London and the UK’s great cities will enable them to plan and fund the key infrastructure that is so vital to stimulate jobs and growth. In London it will equip local politicians to respond to the needs of a city set to grow by one million over the next decade.

'Further empowering our cities will increase accountability, providing a practical solution to a growing frustration amongst voters that too many decisions are made in distant Whitehall.

'We will continue to make the case to all the political parties that these freedoms will drive prosperity throughout the UK and ensure we remain competitive with our global rivals.'

Cllr Jules Pipe CBE, Mayor of Hackney and Chair of London Councils, said: ‘Greater fiscal devolution and the devolution of public services are essential to ensure that London maintains its status as a global city and continues to be a great place to live for all of its citizens. Londoners want us to tackle the issues that matter to them – housing, transport, school places. They want the opportunity to succeed in the jobs market. Businesses want people with the right skills so their businesses can grow. Devolution will enable London local government to make a difference on these key issues and to be accountable for the results. The present over-centralised fiscal arrangements and Whitehall controlled services are failing Londoners and threatening the future prosperity of the capital and the quality of life of its citizens.’

For all the leaders, giving cities greater financial control and freedoms remains the main sticking point with central government. By international standards, British cities are overly-reliant on their national governments for agreeing funding packages and budgets which is both costly and time consuming. City Centred believes most leading cities are able to keep a higher percentage of the taxes they generate and cut out layers of bureaucracy to give longer term security, an income which they can manage and take the long term investment decisions needed to build their local economies. It also incentivises cities to invest for growth – both these institutions and the Treasury will see an increase in tax take as a result meaning both local economies and the national economy benefits.

ENDS The City Centred Campaign agreed the following statement at today’s meeting: “Devolution is not a 'one size fits all', our cities are varied and diverse places with distinct character and need. Empowering cities to make the most of their strengths is vital for a thriving UK economy. One year on from the launch of our joint City Centred campaign the devolution landscape has changed beyond recognition. We welcome the tentative steps the Government has taken towards greater devolution but will continue to press government to deliver real reform so our cities can realise their full potential. Report after report has argued the case for going further, including the RSA City Growth Commission chaired by Jim O’Neil and the CLG Select Committee Inquiry into fiscal devolution. As well as seeking more local control over policies and funding for functions like transport, skills, housing and employment support we are calling on all political parties to agree to devolve property tax powers first to cities and ultimately to all of local government. The UK is still one of the most centralised states in the developed world – despite many years of initiatives apparently designed to devolve powers. Mounting evidence suggests that if our cities had greater fiscal control, they could help make their more economies more competitive. Greater fiscal autonomy would incentivise growth, enable more transparent government and ensure taxation is more attuned to local circumstances. This would mean cities having to rely less on centrally provided grants with locally inappropriate strings attached. Ultimately cities must be given greater freedom from a remote Whitehall machine to allow central and local government to concentrate on their respective priorities.

Our message today is clear: we are ready and the process needs to go at the speed of the fastest, not the slowest. Devolution must apply to all our Great British cities, across UK borders, because it is cities that drive growth for nations, not the other way around.”