London councils to seek devolution of further tax powers

London councils could demand full control of tax powers, subject to a successful pilot of business rates devolution.

A statement of principles, which London Council leaders were asked to sign up to at a board meeting yesterday, says that full control of council tax powers is vital to offset loss of revenue due to London’s unique business rates structure.

Business rates vary across the capital, with three boroughs (Tower Hamlets, Westminster and Camden) accounting for 50% of income.

In contrast, 75% of businesses in Lewisham are small businesses that, under the increase in the threshold announced in the March Budget, would pay no tax at all.

Therefore, the statement says: “Following successful implementation of a London scheme, however, we would want to return to the issues of full control of rate setting – including the safeguards that would be required to prevent a disproportionate tax burden on business – along with a broader range of fiscal devolution.”

These powers could include setting tax liability thresholds, discounts, reliefs, baselines and reevaluations.

Prior to a pilot scheme, London councils could seek to increase the mayoral supplement for funding transport and infrastructure projects.

London accounts for 28% of the total national rateable value despite only holding 16% of the properties.

A recent report from Core Cities UK argued that devolution of tax powers besides business rates will be necessary in all devolved areas.

The capital’s councils will also seek to define distribution of income to the Greater London Authority and boroughs, in order to reward their contribution to growth. This will involve either establishing a defined, periodically-reviewed split between income for the councils and the Greater London Authority, or the establishing of a separate mayoral rate.

They argue that these funding changes are necessary to reach the unique pressures on London, including a rapidly growing population and housing and living costs.

At the meeting, the councils also said that they are currently in talks with the government to allow them control of the capital’s work and health programme, while the £400m adult education budget is due to be devolved to London by 2019.

(Image c. Ray Wewerka)

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.


There are no comments. Why not be the first?

Add your comment


public sector executive tv

more videos >

latest news

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >


Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Cleaner, greener, safer media: Increased ROI, decreased carbon

23/06/2020Cleaner, greener, safer media: Increased ROI, decreased carbon

Evolution is crucial in any business and Public Sector Executive is no different. Long before Covid-19 even became a thought in the back of our minds, the team at PS... more >
read more blog posts from 'the raven' >

public sector events

events calendar


August 2020

mon tue wed thu fri sat sun
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31 1 2 3 4 5 6

featured articles

View all News