Mayors: Devolution

The Government recognises that proposals by combined authority mayors for further fiscal devolution - such as powers over council tax precepts, local business taxation and infrastructure levies - could strengthen local control, accountability and incentives for growth, with implications for the structure of local government finance.

As the Chancellor set out in her Mais Lecture on 17 March, the Government is developing a roadmap for fiscal devolution. This will establish a framework to give mayors of strategic authorities control of a share of certain national taxes that have historically been determined centrally.

The Northern Growth Strategy: Next Steps (19 March) outlined the principles guiding this work, where we are looking at income tax alongside other taxes. The Government is working closely with mayors and businesses to develop the detailed design, including assessing how different fiscal powers could operate and their impact on local government finance. The roadmap will be published at this year’s Budget.

In parallel, the Government is expanding local revenue-raising flexibilities. This includes extending the mayoral precept through the English Devolution and Communities and Empowerment Act, enabling it to be used across all functions in support of economic growth, and introducing powers for an overnight visitor levy.