Empowering England’s counties with new fiscal powers could raise over £4 billion a year to invest in local services, boost economic growth, and support infrastructure, according to a new report commissioned by the County Councils Network.
The report argues that devolving a share of housing, income, and tourism taxes to county and unitary councils would be transformational, not by raising taxes but by allowing local areas to retain a portion of the revenue they already generate.
The proposed measures include:
- Retaining growth in income tax receipts: £3.8bn/year
- Keeping 50% of stamp duty on new homes: £237m/year
- Introducing a £2/night tourist tax: £209m/year
- Retaining 10% of the Apprenticeship Levy: £120m/year
Together, these could generate £4.4bn annually for county areas — equivalent to 10% of an average county authority’s budget — and £8.9bn nationally.
The CCN has outlined how this funding could be reinvested in areas such as transport, skills, regeneration, or local services such as pothole repairs.
The report highlights that counties already contribute significantly to the Treasury — raising £390bn in 2023, or 57% of England’s total revenue (excluding London) — but much of this is redistributed centrally.
Economic Growth Spokesperson for the County Councils Network, Cllr Richard Roberts, said:
“Today’s report from Grant Thornton shows the art of the possible for fiscal devolution and we believe these proposals warrant serious consideration from government and from existing mayors. There has never been a better time consider empowering local areas with fiscal devolution and let’s be clear: this is not about new taxes for local residents and businesses. It’s about using existing taxes more effectively, allowing local areas who understand what’s needed to drive growth to invest to that end.
“More pressingly, there is the shared local and central government need to increase growth, create jobs and build homes alongside the urgency to invest in local economic growth services and infrastructure. The potential revenue generated from the fiscal devolution options modelled in this report would be a game-changer for local areas, allowing them to invest in growth and incentivise areas to maintain productivity gains.
“Whilst there will still be a need for central government to a play a redistributive role to ensure equity across regions, we have long argued counties are the backbone of the economy. Now is the time for government be bold and ambitious and think about unleashing the potential of counties.”
While all counties would benefit, the report acknowledges regional disparities in revenue-raising potential. It recommends that fiscal devolution should complement, not replace, existing government funding, with redistribution mechanisms to ensure fairness.
The CCN is urging ministers to be “bold and ambitious”, especially as the government pursues a ‘devolution by default’ policy. The report follows recent comments from Deputy Prime Minister Angela Rayner supporting greater fiscal powers for councils.
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