Ant Breach

The Budget tomorrow will also see the publication of the fiscal devolution roadmap - the most important reforms to local finance in decades. Here are the top four things we're looking out for - first, is Business Rates Retention for mayors going to be growthy?

Third, will corporation tax sharing be on the menu? This might take longer than a single Parliament, but it would be a powerful complement to income tax sharing that would connect mayors to the success of their local businesses:

The Budget tomorrow will also see the publication of the fiscal devolution roadmap - the most important reforms to local finance in decades. Here are the top four things we're looking out for - first, is Business Rates Retention for mayors going to be growthy?

To build more quickly, the mayors need changes to powers, the planning system, their financing of projects, and their capacity to deliver projects. All of this together will help Britain invest in more and better infrastructure:

But mayors will need more capacity to do all of this - the biggest barrier to devolution at the moment is the need to get more people into the mayoralties with the skills and experience to deliver this stuff locally:

To build more quickly, the mayors need changes to powers, the planning system, their financing of projects, and their capacity to deliver projects. All of this together will help Britain invest in more and better infrastructure:

Planning should also be more devolved, with mayors able to push projects through planning if it's important to their place:

To build more quickly, the mayors need changes to powers, the planning system, their financing of projects, and their capacity to deliver projects. All of this together will help Britain invest in more and better infrastructure:

The centralisation of the state makes it very difficult to deliver new infrastructure, especially projects that are of regional importance. Mayors are a solution to this because they have a combo of scale + places that can absorb responsibilities across these areas safely:

In every part of the country, cities punch above their weight in containing jobs + especially higher-paid (top 20% of pay) jobs. This is why cities matter for local economic growth across Britain - if cities struggle then the national economy will struggle to create jobs.

Cities' role as engines of job creation can be seen if we look at the total number of new jobs in urban and non-urban areas since 2014. Three quarters of all new jobs, and 9 out of 10 all new higher paid jobs were created in urban areas:

Some great charts in this Given our welfare system is not very contributory, big Qs for British policymakers here on how we get more women into paid work if we want immigration to be fiscally positive

Our new report does the numbers on fiscal devolution. By letting the metro mayors keep around 7% of their local income tax (2% in London) and 2% of their local corporation tax (1% in London), we can replace grants in a growth-positive, cost-neutral way for HMT and the mayors:

Wrapping this all up, our recommendations are to initially vary income tax and corporation tax sharing, have a Swiss-style equalisation system for income tax but let corpo receipts float, bridge the IS commitments, and begin next step of BR devolution:

Our new report does the numbers on fiscal devolution. By letting the metro mayors keep around 7% of their local income tax (2% in London) and 2% of their local corporation tax (1% in London), we can replace grants in a growth-positive, cost-neutral way for HMT and the mayors:

By 2030, and assuming growth remains at historical levels, we get outcomes that look like this: pretty similar pounds per head in funding between places. If places do get a stronger growth incentive and grow faster, the Mayor and HMT both get the upside:

Our new report does the numbers on fiscal devolution. By letting the metro mayors keep around 7% of their local income tax (2% in London) and 2% of their local corporation tax (1% in London), we can replace grants in a growth-positive, cost-neutral way for HMT and the mayors:

Our solution to this is to introduce a "Swiss-style" funding system that tops up places to a minimum floor on £ per person, funded by an incremental tariff on places above a different threshold - so the mayors always have an incentive to grow but are protected

Our new report does the numbers on fiscal devolution. By letting the metro mayors keep around 7% of their local income tax (2% in London) and 2% of their local corporation tax (1% in London), we can replace grants in a growth-positive, cost-neutral way for HMT and the mayors:

As a result, if we initially vary the share of income tax the mayors get to keep - and a small crumb of corporation tax to provide a very sharp growth incentive - we can replace the funding mayors get like-for-like on day one. bsky.app/profile/cent...

Our new report does the numbers on fiscal devolution. By letting the metro mayors keep around 7% of their local income tax (2% in London) and 2% of their local corporation tax (1% in London), we can replace grants in a growth-positive, cost-neutral way for HMT and the mayors:

But how do we make this work when taxbases already vary so much across the country? Just look at income tax - 1% of income tax in London raises £90 per person in London, but £23 in Tees Valley:

Our new report does the numbers on fiscal devolution. By letting the metro mayors keep around 7% of their local income tax (2% in London) and 2% of their local corporation tax (1% in London), we can replace grants in a growth-positive, cost-neutral way for HMT and the mayors:

The core challenge for the Government is this trade-off - how can the a local finance system 1) reward places for improving their local economy, while 2) ensuring that places that don't can still provide decent services. Currently the system doesn't really care about 1)