Key Cities Launches Blueprint for City Devolution

Production Line at Nissan Sunderland

Local control of taxes ranging from VAT to stamp duty and council tax must be the foundations of city devolution, according to a new report released today by Key Cities.

Combined with five year funding settlements over a range of policy areas including transport, housing and skills, empowering local authorities in this way would save the Government £2.5 billion every year, the report argues.

Power, people and places: A Manifesto for devolution to Britain’s Key Cities is the first output from a joint research project commissioned by Key Cities from think tank ResPublica. It provides a blueprint for city devolution which can be rolled out across the country, and recognises that the UK’s mid-sized cities are the ‘missing multipliers’ through which economic growth can be stimulated.

The manifesto calls on the next Government to agree to five-year funding settlements, for areas including employment, skills, transport, housing, and infrastructure, which are key constraints on city growth. Importantly it calls for the freedom to set and retain local taxes, such as council tax, business rates, and other concessions appropriate to local circumstances.

The report makes the case that Key Cities and public sector organisations within them can contribute immediately to economic growth. It shows how cities can strengthen their role if the Government devolves new powers. In particular, it argues that Key Cities have the “scale and variety” to test new ways of pursuing economic development and delivering public services.

Dave Smith, Chief Executive of Sunderland City Council and Chair of Key Cities Chief Executives Group, said:

“The Key Cities group was formed to bolster the UK’s prosperity and provide our cities with more opportunities. Our manifesto, Power, people, and places, demonstrates our ability to generate growth and drive innovation at the cutting-edge of our economy.

“With a more stable financial settlement from central government and new fiscal powers, Key Cities can be an important part of building a new economy based on high skilled jobs and high-value added production. Now is a critical moment to seize this generational opportunity for our cities and our country.

“The next Government must provide our members with the devolutionary powers needed to support local businesses and communities.  Only then will we be able to fully maximise our global competiveness”.

Philip Blond, Director of ResPublica, said:

“The Government really needs to give Key Cities control over financial policies which affect local economies. If they allowed this to happen, the Treasury would see bigger returns and the economic output of the country would grow as a whole.

 “In addition to the national benefit, communities would benefit from stronger local economies. This would allow individuals to prosper without having to rely on welfare payments because of increased job opportunities.”

Power, people and places sets out how Key Cities members are pioneering a new model of collaboration based on shared economic expertise rather than geographical proximity, which is critical to answering the productivity challenges the UK faces".