Local authorities should be handed control of £10bn stamp duty tax as the next step in the government’s ‘devolution revolution’, urges a new report.
Beyond business rates: incentivising cities to grow, published by Centre for Cities, analyses the government’s plans to devolve control of business rates to local leaders and argues that councils should be granted more control over their finances, including the power to retain stamp duty tax revenue, worth £10bn in 2014-15.
The report also outlines how devolving land and property taxes would give local authorities responsibility for 41% of their spending (based on 2014/15 figures), compared to just 19% in the current system of funding.
By devolving more fiscal powers, the authors claim, local areas will be incentivised to boost growth and create a sustainable system of local government funding for the future. They would also be able to make spending decisions based on the needs of their local economies.
Alexandra Jones, chief executive of the Centre for Cities said: ‘The government’s move to devolve business rates was an important step in the right direction, but doesn’t go far enough. Devolving land and property taxes would encourage places with weaker economies to develop their tax base, while also giving places with high economic demand more incentives to take the often difficult decisions needed to invest in infrastructure and new housing.
‘This should be the next step in the government’s devolution agenda, to ensure that local leaders across the country have the powers and responsibilities they need to help their local economies thrive in the years to come.’
