Cities should have more control over taxes and public spending, says report by RSA City Growth Commission

A report by the RSA City Growth Commission, a 12-month enquiry into how cities can be empowered to shape and drive their economies, has suggested that cities in the UK should be given the power to revalue council tax bands as well as pool and allocate central government revenue without ringfencing.

Powers to Grow: City Finance and Governance, the fourth interim report from the Commission, concluded that the default mode of ‘Whitehall knows best’ still remains a significant hurdle to the UK’s future economic prosperity. Radical change to overcome this can be achieved, but only if all three parties are daring enough to take on a ground-breaking package of fiscal devolution measures.

“What is ultimately critical for our metros to thrive is for each to identify what is right for them,” said Jim O’Neill, RSA City Growth Commission Chair. “Just as it is the case that those in Whitehall are hardly in a position to know what is best for the future of different parts of our country, however well-intentioned, it is also the case that our central recommendations, again well-intentioned and evidenced-based, may work for some cities and not for others.”

The Commission found that some cities are ready and able to take on the responsibility and associated risks of devolution, in that they have the leadership, financial management and accountability structures to administer a devolved city-region, and should be freed to drive investment, job creation, inclusive sustainable growth and public service reform as soon as is practical.

The Commission concluded, however, that devolution should not be top-down blanket policy and not all metros are ready to take this leap and will have to wait until their economic performance and governance structures lend themselves to devolution and enable them to ride the difficult storms of decentralisation.

“Enabling the leaders of the major urban areas to decide what is right for them, and with it, for them to carry the responsibility for those decisions is crucial,” said O’Neill. “In this report, we lay out the key areas of financial responsibility we believe should be transferred to some metros. Crucially and as clearly suggested by the Chancellor in early August, it is only sensible to devolve this fiscal responsibility to those urban areas that can demonstrate they can succeed with this greater autonomy.”