Empowering England: Fiscal Devolution and Regional Tax Funding

A think tank suggests England's mayors should be funded from regional taxes instead of government grants, with safeguards for poorer areas. Proposed fiscal devolution aims to decentralize power, allowing regions to keep a portion of income and corporation tax revenues.

A new proposal suggests England's mayors should receive funding from their regions' tax revenues rather than relying on government grants. The move, aimed at decentralizing power, includes measures to ensure financial protection for poorer areas.

Prime Minister Andy Burnham's initiative seeks to diminish London's economic and political dominance, positioning fiscal devolution as a key strategy. The Centre for Cities, a think tank, recommends mayors retain 7% of locally generated income tax and 2% of corporation tax, potentially replacing over £5 billion in existing grants.

The report highlights the UK’s low percentage of tax raised below the national level compared to other countries and calls for a balanced redistribution model. As discussions continue, the government is preparing to detail its fiscal devolution strategy ahead of the upcoming budget announcement.