Thomas Bridge 01 July 2014

Labour unveils devolution plan for major cities

Labour has today outlined plans to devolve over £30bn of funding to local regions in a bid to tackle Britain’s ‘fractured economy’.

A policy review by former transport secretary Lord Adonis has recommended handing over three times the level of money currently planned to councils and Local Enterprise Partnerships (LEPs) for housing, transport, business support, employment and adult skills.

Labour leader Ed Miliband has endorsed the key findings of the report, which also calls for the creation of more Combined Authorities modelled on that which already exist for Greater Manchester.

Under Labour, these larger authorities would also receive a more sizable share of business rates for local investment. This funding would be offset by grant reductions.

Ed Miliband this morning told an audience in Leeds the next Labour Government ‘will ensure city and county regions, like this powerhouse economy, get control of business rates revenue’.

‘I know the next Labour Government cannot solve every problem by pulling levers in Whitehall. We can only do it by working with, harnessing the energy, the ideas and the dynamism of great businesses, cities, county regions.’

The measures adopted by Labour are being termed ‘a historic reversal’ of recent centralisation.

Measures would also strengthen the power of LEPs and provide a ‘substantial’ single pot of funding for economic development.

Lord Adonis added: ‘Whitehall needs to hand down budgets and powers for this purpose – not just talk about handing them down, as the Coalition has done since the Heseltine Report.

‘England’s business leaders and local governments need empowering to invest in infrastructure, skills and economic development.’

Yesterday, Labour outlined plans to cut and freeze business rates for more than 1.5 million properties if elected.

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