Experts recommend greater devolution for London

The capital needs greater financial independence to drive jobs and growth, according to experts who gave evidence to the Mayor's London Finance Commission.

The commission, chaired by leading academic Professor Tony Travers of the London School Economics, was created by the Mayor as a key part of his manifesto pledge to ensure that London is given greater discretion over spending to boost economic growth, as the capital's population continues to rise towards 10 million.

Today it has published a progress report, which describes its work to date and sets out a timeline for the panel to draw up detailed recommendations on funding arrangements in the capital and how they could be improved.

A series of evidence sessions from financial experts – including Sir Michael Lyons, author of the Lyons Inquiry into public finance, Director of the Institute for Fiscal Studies Paul Johnson and Lord Heseltine – and written submissions from London boroughs, London Councils, businesses and the voluntary sector, argued without exception for greater financial independence for the capital. Suggested improvements put to the commission have included the potential devolution of stamp duty, the ability to raise new taxes and greater control over capital investment in London.

The commission has decided any proposals taken forward must incentivise growth, increase efficiency and increase local autonomy.

The Mayor of London Boris Johnson said: “London is the motor of the UK economy, and investment in the capital helps drive jobs and growth throughout the country.

“It’s vital that we improve its economic prospects and secure London’s future as the best big city in the world. “I am grateful to all those who have submitted such high quality evidence to the London Finance Commission, and look forward to hearing the panel’s recommendations.”

Chairman of the London Finance Commission Tony Travers said: “The evidence we have received overwhelmingly suggests a need for greater devolution of financial power to London.

“The Commission must now decide how best to allow the Mayor and the boroughs greater freedom to use public money in such a way as to promote growth. In doing this, we recognise the need to accommodate the rapid growth in the city’s population – equivalent to an extra borough every three years.

“More people will need more train capacity, more schools and increased health provision. London can pay for these itself if it were given the means to do so.”

The London Finance Commission's interim report is available at /london-finance-commission. Its final recommendations will be made in Spring.