Analysis finds devolved tax powers could add £4 billion for local services
The report argues that new fiscal arrangements which enable authorities to a proportion of revenue from income tax, stamp duty and the apprenticeship levy alongside a new tourist tax could prove transformational and support the delivery of the Government's priorities.
The County Councils Network, which commissioned the report, stressed the proposals do not advocate tax rises and acknowledged that a process of redistributing tax revenue would need to be established to address regional variations in the amounts generated.
Deputy Prime Minister Angela Rayner recently said she wanted 'more push' towards fiscal devolution as part of the Government's pledge to transfer central decision making to local areas.
The English Devolution White Paper published last year states that mayors could submit proposals for new powers, such as fiscal devolution, which the government is obliged to consider.
The guidance recently published alongside the the Devolution and Community Empowerment Bill earlier this month stipulates that new strategic authorities can pilot devolved powers to make it 'easier to deepen devolution over time'.
The 20 CCN councils, including top tier shire authorities and unitaries, serve about 45% of the population and contributed almost £390 billion in national tax receipts in 2022/23, the report said.
This level of county revenues amounted to 44% of the revenue total for England of £891.3 billion, rising to 57% if London's contribution is not taken into account.
This includes contributions of 62% in income tax and and 55% in VAT.
The analysis found that expenditure in county areas totalled £273 billion, amounting to a net benefit to the exchequer of £113.6 billion a year.
The report said allowing authorities to retain 'better than expected' income tax growth could raise £3.8 billion in county areas annually and would 'dramatically incentivise' local job creation.
Retaining half of stamp duty on new homes could provide about £237 million and encourage councils to deliver more housing, the analysis showed, while a tourist tax set at £2 a night could generate about £209 million in extra annual revenue.
If county and unitary councils were granted 10% of funds from the apprenticeship levy generated locally, councils could direct an estimated £120 million a year to skills and growth.
The report concluded that these measures combined could raise about £4.4 billion in county areas, which equates to 10% of an average budget for these authorities, while nationally the figures are about £8.9 billion a year.
Richard Roberts, CCN's economic growth spokesman, said the research 'warrants serious consideration from government and from existing mayors'.
He added: 'There has never been a better time to consider empowering local areas with fiscal devolution and let's be clear: this is not about new taxes for local residents and businesses. It's about using existing taxes more effectively, allowing local areas who understand what's needed to drive growth to invest to that end.
'More pressingly, there is the shared local and central government need to increase growth, create jobs and build homes alongside the urgency to invest in local economic growth services and infrastructure.
'The potential revenue generated from the fiscal devolution options modelled in this report would be a game-changer for local areas, allowing them to invest in growth and incentivise areas to maintain productivity gains.
'Whilst there will still be a need for central government to a play a redistributive role to ensure equity across regions, we have long argued counties are the backbone of the economy.
'Now is the time for Government be bold and ambitious and think about unleashing the potential of counties.'
London Councils, which represents the 32 boroughs in the capital, said authorities' current reliance on council tax and government grants perpetuates unsustainable financial stress.
Claire Holland, chairwoman of London Councils, said: 'Devolving more fiscal powers to a local level is crucial for fixing this broken system and ending the crisis in council finances.
'With more autonomy and flexibility – such as powers to introduce an overnight accommodation levy – we would be in a much stronger position to respond to our communities' needs and encourage economic growth.
'London is the powerhouse of the UK economy, but still faces immense challenges around productivity, unemployment, and poverty, as well as an enormous £500 million funding gap in boroughs' budgets.
'Fiscal devolution could help us tackle these issues and maximise London's contribution to the country's future prosperity.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
13 minutes ago
- The Independent
Andy Burnham calls on Starmer to tackle ‘explosion of homelessness'
Rough sleeping has almost doubled since Covid, a damning report found, with Andy Burnham calling on Sir Keir Starmer to make tackling homelessness a 'moral mission'. The Greater Manchester mayor piled pressure on the prime minister to follow the success of the region offering housing to the homeless. 'If you set people up to succeed – they largely do,' Mr Burnham said. He added: 'Tackling homelessness is not just an economic imperative, but also a moral mission.' Mr Burnham's calls came as a report by the Centre for Social Justice (CSJ) warned of an 'explosion in homelessness' following the pandemic. It found a 94 per cent increase in rough sleeping since Covid, with around 47,000 people sleeping on the streets in England in the last year. The CSJ warned rough sleeping is 'just the tip of the iceberg', with councils across the country spending billions on temporary accommodation and being pushed to the brink of bankruptcy. Labour's manifesto promised to 'put Britain back on track to ending homelessness' after saying progress tackling the crisis was undone under the Conservatives. It committed to working with mayors and councils across the country on a strategy to end rough sleeping. The CSJ called on Labour to adopt a so-called Housing First approach similar to Greater Manchester's, which provides the homeless with immediate, unconditional access to permanent housing and ongoing support. 'Housing First has been shown to be the most effective and well-evidenced intervention to end homelessness for Britain's most disadvantaged and entrenched rough sleepers,' the report said. It found that Housing First is three and a half times more effective than conventional homelessness services, with 84 per cent of users sustaining long-term housing after three years in the programme. Rolling out Housing First across England would take 5,571 people off the streets by 2029/30, around a tenth of all rough sleepers. And the CSJ said it is 'excellent value for money', with every £1 spent freeing up £2 in temporary accommodation and other costs. CSJ chief executive Andy Cook said: 'Housing First has emerged as one of the most effective approaches to ending rough sleeping. Angela Rayner now has a unique opportunity to champion a national rollout which would be a gamechanger in the fight to end rough sleeping.' And Liverpool mayor Steve Rotheram, whose region has also trialled Housing First, said: 'We've proven it works. Now we need to match that with ambition, and make it the foundation of a national mission to end homelessness for good.' And the Steve Morgan Foundation, which supports charities, said Housing First had been 'transformative' and 'it is now time for the government to take this success to the rest of England'. Chairman Steve Morgan said: 'I know firsthand the importance of a stable home. Without one, nothing else in life works, not your health, not your relationships, and not your ability to find or keep a job. That's why I believe Housing First holds the key to tackling rough sleeping in England.' A Ministry for Housing, Communities and Local Government spokesperson said: 'We are taking urgent and decisive action to end homelessness, fix the foundations of local government and drive forward our Plan for Change. 'We are providing £1bn for crucial homelessness and rough sleeping services including funding for Housing First and other forms of accommodation for people who sleep rough. 'This is alongside tackling the root causes by building 1.5 million new homes, abolishing section 21 no fault evictions and boosting social and affordable housing – backed by £39bn investment.'
The Guardian
13 minutes ago
- The Guardian
Border Force chief who ‘suggested game of Naked Attraction' with colleagues was able to leave civil service with unblemished record
A Home Office investigation has found one of its most senior officials harassed and behaved inappropriately towards a female colleague, before being able to leave the civil service with an unblemished record after a 'shambolic' disciplinary process. The case has caused such alarm in the department that the new permanent secretary, Antonia Romeo, has ordered an immediate review of complaints, conduct and disciplinary procedures to 'ensure confidence in the integrity of the system'. Steve Dann, the former chief operating officer (COO) of Border Force, was effectively banned from visiting the organisation's offices in Paris in 2023 after he suggested to female officers that regional directors could play a game of Naked Attraction, the Channel 4 dating show in which contestants stand in front of each other fully nude. He told investigators he did not recall the incident. Dann, who was in the £120,000-a-year post for four years, faced other allegations of misogynistic name-calling and making comments to women with sexual connotations, according to Home Office sources. He denied the allegations, suggesting comments had been taken out of context and that selective evidence had been used during the investigation by the Home Office's professional standards unit (PSU). He acknowledged during the process that some of his comments may have been careless, but said he had never intended to upset or offend. After a chaotic HR process, which one source said was littered with 'procedural errors and delays', the original grievance was eventually upheld on appeal. However, Dann was not informed about the process until the initial stage was completed. He was also subject to a parallel misconduct investigation into the claims which was not upheld. Dann decided to leave the Home Office in December last year, standing down as the COO of Border Force, a role that placed him at the centre of the organisation's key responsibilities, including securing the UK's borders by enforcing immigration regulations and patrolling coastlines during the small-boats crisis. He has since entered the private sector in the field of security and law enforcement operations, and public safety. The complainant first reported Dann in February 2024, after working with him for 18 months. An initial internal grievance inquiry was launched two months later, with the final PSU report quoting named Home Office officials who appeared to confirm a series of sexist and misogynistic comments, according to sources. While the complaint was not initially upheld, it was later upheld on appeal in October 2024. Dann was not involved in this process and was not given the opportunity to respond. At the same time a separate misconduct process was launched, also based on evidence in the PSU report. This was not upheld, no formal disciplinary sanction was imposed, and there was no record of it on Dann's file, although Home Office sources said he was asked to undergo training in response. The claims being investigated included the colleague being told in a voice note that she was 'very pretty', which the PSU report concluded was 'reasonable' for her to have interpreted as harassment. Other comments were described by the report as 'inappropriate and offensive' and 'unprofessional topics with a sexual connotation'. According to sources, the report said he messaged about one person who attended a meeting suggesting that she had a 'porn star name', which he told the inquiry was meant in a 'lighthearted' way. On a separate occasion, he was said to have misnamed a female colleague 'kinky', although he later admitted this had been a 'careless' thing to say. During a discussion on the diversity of his office, Dann allegedly said: 'Don't forget the sweaty woman in the corner', referring to a colleague going through menopause. In the report, he denied making this comment. In another meeting, in December 2022, he asked junior colleagues if they knew what a 'fluffer' was, and then explained it was 'someone whose job was to keep a porn star's penis erect', sources said. He denied to investigators that he had made the remarks. On the official visit to Border Force in Paris in April 2023, he brought up the Channel 4 naked dating show Naked Attraction to two female officers working in intelligence. In remarks corroborated by witnesses, he added: 'We were thinking it could be all the regional directors and, you know, people had to look at it and guess whose penis it was.' The officers were 'very shocked' by the conversation and felt 'incredibly uncomfortable', a senior official told investigators, but when they were asked if they wanted to make a complaint they said they would prefer that Dann not return to the Paris office. This was reported to Border Force chiefs. Dann told them he did not recall the incident. One senior official who witnessed the exchange said they were 'disappointed' by Dann's conduct, which they felt was 'inappropriate'. Several others said they considered that he was 'prone to oversharing' about his private life at work, sources with knowledge of the report said. The appeal, which was based on the same evidence in the PSU report, was finally concluded eight months after the initial complaint. It was after the Labour government entered office, and six weeks later Dann left his role, declaring that after nine years at the Home Office it was time to 'embrace new challenges'. In a letter to the complainant in October 2024, the Home Office upheld the grievance, acknowledging that Dann's conduct had fallen below the standards expected from a senior official and was in breach of the department's policies on appropriate behaviour, sources said. However, Dann – who was previously a 'people champion' and diversity lead in the civil service, roles that focused on improving the workplace environment, as well as representing the organisation in parliament and in the media – avoided any formal consequences because the separate earlier disciplinary process had already concluded and the rules meant it could not be reopened. According to sources, Dann told the initial investigation he had worked incredibly hard in a stressful frontline environment. Much of his time running Border Force operations was when the Tory government was struggling to get control of irregular migration, including small-boat crossings. Several of the witnesses said they had not been offended by his behaviour. However others, including senior civil servants and junior frontline operational staff, found his conduct inappropriate and unprofessional, according to sources who have seen the final PSU report and with knowledge of the final outcome. During the PSU investigation, Dann denied some of his conduct and said other incidents had been taken out of context, and that selected evidence had been used. But sources said he added that 'on reflection' there had been times when some of his comments had been 'careless', although they were not meant in a malicious way. When approached by the Guardian, he declined to comment. Yvette Cooper, who was home secretary throughout the latter part of the grievance process, has repeatedly and vocally called out workplace discrimination, misogyny and harassment. The case was flagged with her office although she is understood not to have been personally aware. A Home Office spokesperson said: 'While we do not comment on individual HR cases, where there are allegations of inappropriate behaviour or sexual harassment the Home Office will investigate and take appropriate action. 'The Home Office expects the highest standard from all members of staff and does not tolerate anyone displaying or taking part in unacceptable behaviour. 'The new permanent secretary has already commissioned a review of complaints, conduct and disciplinary procedures, to ensure absolute confidence in the integrity of the system.'
Telegraph
13 minutes ago
- Telegraph
Supermarket bosses attack Reeves's plan for fresh tax raid
Tesco and Sainsbury's have warned Rachel Reeves that plans for a £1.7bn tax raid on big shops would accelerate the decline of the high street. The intervention by the country's two largest supermarkets marks a significant escalation in the backlash against the Chancellor's plans for a shake-up of the business rates system. Retail chiefs fear will Ms Reeves will deal another devastating blow to Britain's struggling town centres. Ken Murphy, boss of Tesco, told The Telegraph that the move threatened 'investments in customers, colleagues and communities'. His comments are likely to fuel fears of fresh price rises, redundancies and another cull of shops as retailers look to offset swinging cost rises introduced by a cash-strapped Labour Government at the last Budget. The reforms will increase business rates for department stores, supermarkets and those with larger premises. Mr Murphy said: 'Increasing the burden on large shops would hinder rather than help our town centres. Many of these shops are anchor stores in their local communities.' Simon Roberts, the Sainsbury's boss, predicted that retail's big beasts would 'pull away from our high streets' as they sought to weather a jump in National Insurance contributions and minimum wage increases. The sector is also concerned about the potential costs of of Angela Rayner's Employment Rights Bill. Mr Roberts said: 'The changes being proposed will further increase the negative impact of business rates and won't stimulate the growth or investment into our high streets and jobs that we all want to see. The Government promised fundamental reform to level the playing field but the changes we are hearing about will not deliver this – they will not stimulate growth or investment.' Opposition is also mounting beyond the big grocers. Alex Baldock, the boss of electricals giant Currys, accused Ms Reeves of 'rushing' changes to the business rates system that will have widespread implications for retailers already grappling with a tsunami of additional government-imposed costs. Jobs at risk Over-burdened retailers are already grappling with 'a perfect storm' of 'extra costs and red tape', which is 'bad for jobs, investment and growth,' he said. 'The mooted hikes in business rates will just make things worse.' Mr Baldock warned that the overhaul would 'shutter more stores' and 'leave more gaps on the high street', as well as harming employment opportunities for young people. Thierry Garnier, the chief executive of B&Q's parent company Kingfisher, warned that the Treasury's latest tax grab would harm 'communities across the UK'. The Chancellor is expected to use her next Budget to ramp up business rates in a desperate attempt to plug a £5bn hole in the public finances created by abrupt about-turns on benefits and winter fuel cuts. As part of efforts to level the playing field, businesses with bigger premises will be charged more in order to reduce the rates paid by smaller stores. The effective discount is intended to target online retailers and save independent firms, ministers contend. Last month, the British Chambers of Commerce warned that tax rises are 'paralysing' British businesses. One in three companies were cutting jobs to weather the £25bn National Insurance raid, it said. 'Larger physical stores, which support more jobs, should not be penalised through a higher multiplier,' Mr Garnier said. Pub bosses protest The hospitality industry is also braced for further pain with pub bosses queueing up to express their disquiet last week. Simon Emeny, the chief executive of Fuller's, said pubs were already labouring under 'a ridiculously disproportionate' £25bn business rates burden. Sir Tim Martin, the boss of JD Wetherspoon, complained that pubs were already having to contend with a 'ferocious tax disadvantage '. The sector maintains it is unfair that pubs pay VAT on food sales while supermarkets do not have to, enabling them to sell alcohol at a discount to pubs. Meanwhile, the Government's own analysis shows that the impact of the planned reforms will be felt far and wide from hotels, restaurants and theatres to cinemas, theme parks and even zoos. At the same time, only a fifth of those are warehouses used by internet retailers. In a speech to prominent City figures attending the Mansion House dinner in London on Tuesday evening, Ms Reeves claimed 'Britain is better off under Labour'. A Treasury spokesman said: 'We are a pro-business Government that is creating a fairer business rates system to protect the high street, support investment and level the playing field. 'To deliver our manifesto pledge and provide certainty and support to the high street we intend to introduce permanently lower tax rates for retail, hospitality and leisure properties from next year.'
