The UK is one of the most centralised countries in world. While Scotland, Wales and London have a measure of devolution, the rest of the country remains highly centralised. And most of the funding for the devolved governments comes from central government grant, who raise only a poultry sum themselves from tax collected. In London less than 7 per cent of the Greater London Authority’s budget is funded from local taxation whereas New York and Tokyo raise over 50 per cent of their budgets.
Despite endless political pronouncements on “localism”, successive governments have failed to wrest power from Whitehall. The Commons Select Committee is now consulting on this subject; on whether and how more fiscal and financial powers should be devolved to English Cities.
The answer to the question whether they should be is “yes”. The answer to how is “where there’s a will there’s a way . . . “ but there’s the rub.
Why yes? Because the begging bowl approach to local investment is on the whole unhealthy. Much work has been done on identifying what makes cities competitive in the global economy and this strongly supports high levels of city self-government. If people have more control over the money they raise and how they spend it they tend to be more reasonable about their spending plans, they can plan longer term (rather than annually planning investment in e.g. transport), they are sensitised to local needs and opportunities and they have an incentive to invest in projects which ultimately earn them more money.
But is there the will to devolve power, and importantly, money? Even if the Select Committee recommends this, how will the government departments react to a diminution of their power bases . . . ?