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09.02.15

Core Cities lay out devolution timetable for England

The UK’s largest cities outside London have called for the creation of a new Devolution Agency within 100 days of the next government coming to power, alongside Scottish-style tax powers to encourage growth.

A new study shows that devolution of such powers could generate an extra £222bn and 1.3 million jobs by 2030.

The report recommends the devolution process in England echo that of Scotland and be implemented by 2025. It should include the retention of some property taxes and the ability to vary income tax and corporation tax, in line with the proposed powers of the Scottish parliament in Edinburgh.

Deals done in Manchester and Sheffield in recent months, where the cities have been granted greater powers over areas such as transport and housing, “could mark a historic turning point in the long-standing demand for city-based devolution in the UK,” the report says.

The next government should set up a Devolution Agency within 100 days of coming to power, with the aim of handing greater powers to cities by the end of this decade, they recommend. The report, Restoring Britain’s City States, by the think tank ResPublica, says: “Cities and the regions outside of London and the South-East have been ignored and left to wither on the vine.”

It has been launched today in Glasgow by the Core Cities Group, as part of its devolution summit. The group represents Bristol, Birmingham, Cardiff, Leeds, Liverpool, Newcastle, Nottingham, Glasgow, Manchester and Sheffield – who together account for a quarter of Britain’s economic output and represent more than 21 million people.

Doing nothing is no longer an option, the report says, because Whitehall cuts “under the seeming imperative of austerity are happening at such a scale and pace that local government in its current form simply cannot survive”.

The radical proposals also call for the Core Cities to be allowed to borrow on housing revenue account subject to debt deals with individual cities and city regions. These deals would be related to the growth engendered in the regions by devolution.

The plans demand the fullest possible devolution of public spending and tax raising powers to the UK’s largest cities and city regions. The report says all regions should have a visible political figure in the form of a ‘metro mayor’ or direct accountability through elected city region cabinet.

The report argues for full local authority retention of property taxes, council taxes and a slice of income tax retained locally, and control of business rates within an equalisation mechanism.

ResPublica also wants one city region to come forward to pilot variable income and corporate tax rates to see if this can reverse economic decline and address the economic imbalance in the country.

It also called for new Local Public Accounts Committees with enhanced powers to ensure that all public services are integrated across the new devolved areas and that only one set of outcome measurements for public spend are applied across the whole city region.

Report author and director of ResPublica, Phillip Blond, said: “It’s time to change the old ‘one size fits all’ model of centralised public services delivering the same thing to everybody regardless of need. It simply isn’t working for the Core Cities. They deserve a better, more integrated system, free of all external ring-fencing. If we do this correctly the benefits to the public purse will be in the billions of pounds.”

A detailed timetable to city based devolution is outlined in the report:

  • Pre-election: there must be legislative reform to give authorities greater flexibility in working across functional economic areas.
  • Post-election: in the first 100 days of the next parliament a Devolution Agency needs to be established to oversee the changes.
  • 1st year: devolved funds for transport, housing and employment.
  • By 2016: a devolution pilot in one city region where income and corporation tax variation would be devolved and implemented.
  • By 2020: pilot extended to all city regions.

The report also recommends that all city authorities commit to come together with neighbouring regions to form combined authorities. Cities should also commit to “new levels of accountability and governance”, including direct elections for devolved authority leaders.

The Core Cities would like a commitment from all the major parties to include adoption of a statutory presumption in favour of devolution in their manifestos and for them all to identify a comprehensive package of powers and legislative timetable for cities in line with the enactment of the Smith Commission in Scotland. It also says the next government should commit to extending the legislative framework for city-based devolution to enable ‘The UK Devolution Act’.

City leaders will also use the summit to launch a “freedom charter” calling for more autonomy. The charter calls for greater local power, saying it is “the only way to strengthen both local and national democracy, giving people a stake in their own future, trusting them to make the right choices for where they live”.

Sir Richard Leese, the leader of Manchester City Council, said: “It is only by devolving powers to cities and their regions that the UK can succeed on a global stage. What is good enough for the UK’s nations should be good enough for our cities. We are proposing a revolutionary shift in power from our remote parliaments to local people who know their places best.”

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