Fiscal autonomy for Mayors and local councils is the next step forward in devolution - The Yorkshire Post says

And he is right to call on the Government to allow mayors and council leaders to retain more local cash as part of a new era for English devolution.

While progress has been made on devolving powers, the UK still remains one of the most centralised countries in the developed world, with Westminster setting all but a tiny fraction of taxes.

To understand the scale of the problem, and it is a problem when so many regions are being left behind, you need only look at the OECD statistics from a couple of years ago.

Taxation at a local or regional level amounted to 16.2 per cent of GDP in Canada, 13.3 per cent in Germany, 9.4 per cent in the US and just 1.7 per cent of GDP in the UK. This is important not just from an economic development perspective but also from the view of democratic accountability.

Giving mayors and local councils greater fiscal responsibility means more accountability. It provides more clarity to the electorate as to what money is being spent on in their local area.

Mayors and local authorities are also better placed to understand the challenges their communities face and are therefore able to prioritise what matters most to the people living there.

As Lord O’Neill says, “Proper fiscal autonomy would bring power and accountability closer to communities, while protecting local economies from shifting sands in Westminster and allowing us to focus on the fundamental barriers to productivity.”

The new ‘trailblazer’ devolution deals are a step in the right direction, allowing mayors to retain 100 per cent of business rates. Expanding fiscal autonomy is much needed to help boost productivity in regions like ours.