Antonia Jennings, CEO at Centre for London, comments on Andy Burnham’s announcements on new devolved powers: 

“Today marks the most significant moment for devolution in London since the creation of the Greater London Authority and Mayoralty of London over 25 years ago.”

“For years, Centre for London has advocated for moving power out of Whitehall and closer to communities and local people. But, devolution must work for every region – including the capital. It’s likely London’s settlement might need to look different, reflecting the scale of the London economy, and maturity of the mayoral model.

“If Andy Burnham wants to deliver ‘growth in every postcode’, London has to be part of that story. The capital generates almost a quarter of the UK’s economic output, helping fund services across the UK. London’s success is deeply connected to the success of the entire country.

This White Paper must recognise London’s unique position. A capital city of nine million people, one of only two net contributing regions to the Treasury, and home to local infrastructure of national importance. London is different to the rest of the country, and its settlement should inevitably be different. That should not be controversial.

The long-term goal should be good growth across every part of the UK, with every region empowered to prosper, attract investment according to its need and strengthen its own public finances.

But we are not there yet. London continues to fund the rest of the UK, while facing economic challenges of its own. Productivity has stagnated. Housing costs continue to place enormous pressure on Londoners. 1 in 3 children live in poverty. And too many young Londoners are struggling to step into the job market.

The answer is not to wait for a future settlement once other areas have caught up. The answer is to give London’s leaders the tools to tackle these challenges now before they get worse.

London has shown what can be achieved when power and responsibility are aligned. From the delivery of the Elizabeth Line to major steps forward in adult education, we’ve proved the capital can and should be trusted.

To that end, while Burnham’s proposal to allow locally funded projects worth up to £500million is welcome, London’s infrastructure needs exceed this threshold. Even projects deemed relatively ‘cheap’ for the capital, such as the West London Orbital, are projected to need funding of at least double this figure. Long awaited projects like the Bakerloo Line Extension are set to cost at least ten times that amount.

Final proposals in the White Paper should include a dedicated chapter for London, recognising the scale of the capital’s economic role, nationally and globally, as well as it’s complex internal workings.

Above all, London needs long-term fiscal certainty. If the Government wants a successful programme of devolution across the country, it cannot lack ambition and clarity on its approach to the capital.”

Centre for London recommend the government considers the following steps within their programme of fiscal devolution. We can comment on all of the following:

• Full retention of business rates to London’s government, building on the success of the previous pilot.
• Carefully designed income tax retention arrangements that support growth while ensuring fairness across London’s boroughs. London’s headline need is long term infrastructure investment, so equalisation needs to factor this in and not create an environment where growth is effectively temporary.
• Stronger powers to borrow against future growth and infrastructure revenues, enabling London to invest in major projects and repay that investment over time.
• Reform of property taxation and council tax, creating a fairer and more sustainable system while preserving local democratic accountability.