Midlands leaders hail ‘financial firepower’ from devolution shake-up
Midlands Mayors Richard Parker and Claire Ward say sweeping tax reforms for England’s regions will accelerate investment in housing, transport and skills.
Prime Minister Andy Burnham announced last night that combined authority mayors will get a share of income tax revenue from 2028, part of a drive to decentralise powers away from Westminster and into the UK’s regions.
The Prime Minister will also allow mayors to hang on to a larger share of business rates from next year, as well as giving them greater planning powers and more control over transport and infrastructure schemes – a move described by the government as the “biggest transfer of power from Westminster in a generation”.
The Government plans to replace central grants from Whitehall with a system which allows regions to generate more of their own income, a move which will end a “Whitehall-first culture” that has “held back local areas for decades”, according to Burnham.
The full details of the settlement will be laid out alongside the Autumn budget statement in October, but research from Burnham-aligned think tank Re:State suggests the move could be worth more than £1bn to combined authorities in the Midlands.
Parker says the added “financial firepower” will provide a further boost to the West Midlands, which was established as a combined authority in 2016, pledging to spend more on jobs and skills, affordable housing, and transport.
“We’ve already shown under devolution what we can achieve when we are trusted, smashing government targets on homes, jobs and business support while building new rail stations and Metro routes,” he said.
“But the financial firepower being given to me by the Prime Minister means we will be able to go even further and faster, delivering the things that really matter to local people.
“The Prime Minister trusts us to deliver. He knows how much more we can achieve by putting further powers and funding into the hands of local people – who have skin in the game. Local decisions are better decisions and that means more local lives changed for the better.”
In addition to a share of what the region pays in income tax and business rates, local leaders will gain greater control over services including housing, transport, skills, jobs and public services.
These include putting rail and bus services under greater local control, stronger planning and regeneration powers, speeding up approvals for major transport schemes such as trams, and giving Mayors control of 16-19 funding and employment support.
East Midlands Mayor Claire Ward. Credit: Mike Sheridan/Place Midlands
Meanwhile, East Midlands Mayor, Claire Ward, said the move would mean more cash would be retained in the East Midlands, adding that decisions about issues in the region should be decided by local administrations.
“This money gives us the opportunity to invest even more in the things that matter: investing in our communities and high streets, supporting businesses to grow, creating more social housing and better transport,” she said.
“This new share of income tax means that when our economy grows, more of that success stays here in the East Midlands.
“A prime example is our city of Derby. It is the highest earning area outside of London, but this is not reflected in growth results.
“I have already shown what can be achieved when investment is trusted to local leaders, and these new powers will help us go even further. Every pound we can reinvest locally is another opportunity to create a stronger, fairer East Midlands for current and future generations.”
The Prime Minister says the deal forms the largest ever package of devolution reforms offered to English regions.
In a statement, he said the Government’s ambition is to extend the benefits of devolution across the whole UK, and to give communities more control over their future.
“Under our plans, more of the taxes raised in a community will stay in that community. Soon, every local leader will have the power and resources to improve public transport, build homes and create jobs,” he said.
“I know what it’s like to be ignored by politicians in Westminster. I’m not going to make that same mistake now I’m PM.
“The whole of government will now pull together behind the people and places that desperately need our support. This is how we’ll bring back hope and bring power home to you.”
