London Mayor bangs the drum for enhancing powers of cities

In what he pitched as a major shift in the Government’s approach to devolving powers to the regions, Greg Clark told the Conservative Party conference that in the future “the burden of proof” will be shifted away from local councils and on to Government Ministers in the ongoing battle for control of the public purse strings.

Mr Clark called on England’s largest cities to come forward with demands for extra powers and funding, insisting their chances of success will now improve immeasurably.

This week Mayor of London Boris Johnson joined forces with the leaders of England’s eight largest cities, including Leeds and Sheffield – the so-called Core Cities group – to launch a new campaign to be granted a raft of money-raising powers.

The authorities are calling for control over council tax, stamp duty, land tax and business rates – with the ability to keep the revenues, rather than relying on central Government grants.

The cities claim this would provide stable and continuous funding to stimulate economic growth according to local needs.

In his keynote speech to the conference yesterday, Mr Johnson said London is driving job creation across the UK and has left regions “fizzing with competitiveness” by offering contracts for major infrastructure schemes to firms around the country.

The Mayor said: “That London’s government is joining with England’s largest cities to call for change is an historic and significant move. It’s a partial but positive and practical answer to the conundrum about English devolution, and I believe it is good not just for the cities involved but for the country at large.

“My aim is for the capital to win fiscal reforms – namely those that give residents and businesses a closer say over where their hard-earned taxes are spent.

“This formula can be applied to cities across England, ending stop-start finance settlements and instead providing a reliable stream of funding to enable investment, jobs and growth.”

Senior Coalition figures including David Cameron and Nick Clegg have repeatedly stressed the Government’s commitment to devolving further power to towns and cities around the country.

“City Deals” were signed with all eight core cities last year. A second wave are expected to be unveiled next month, including a package of new powers for Hull.

The Government also announced a new £2bn-a-year “local growth fund” for local areas to bid for from 2015, following the recommendations of Lord Heseltine’s review on regional growth.

But speaking at a fringe meeting, Treasury Minister Mr Clark said the new approach would go “far beyond” anything outlined so far.

“There is a commitment on behalf of my Ministerial colleagues across Government that any Local Enterprise Partnership can make propositions relating to any part of Government spending and say - ‘we think it would be done better locally’,” he said. “And the onus would be on colleagues in Government to prove why this is not the right step to take.

“The burden of proof will be on Government to demonstrate that this would be injurious to growth rather than the other way round.

“It really gives the right of initiative for the first time to places right across the country who for decades, probably over a century, have seen year by year powers taken away and invested in Ministers and officials in Whitehall.”