More taxation powers, including the ability to keep a proportion of income tax, should be devolved to England’s three biggest city regions, a think-tank has argued.
Centre for Cities’ new report, In place of centralisation: A devolution deal for London, Greater Manchester, and the West Midlands, says fiscal devolution is key to growth in the biggest urban economies.
It argues that allowing city regions to keep a share of income tax and all business rates revenues and then re-invest locally would encourage their economies to grow at a faster rate by the mid-2030s.
Centre for Cities has estimated that Greater Manchester and the West Midlands could raise £152m and £121m respectively in income taxes by 2038 in a medium growth scenario, with the Treasury also increasing its overall revenues.
The think-tank said the regions would need additional powers to take advantage of increased spending control, including planning reforms, control over commuter railway infrastructure, and control of public services and regulations, such as hospitality licensing.
Report co-author Anthony Breach said: ‘We would like to see serious new plans for devolution put forward in the next parliament.
‘The challenges of bringing big cities’ powers in line with cities of a similar size in Europe are considerable but not insurmountable.
‘Once we have shown how devolution at this scale can work for our biggest city-regions, other cities should be able to benefit from it as well.
‘The idea is to establish the next phase of devolution across England.’
