Everything you need to know about English Devolution
On this page you can find the answers to the most frequently asked questions on English Devolution ahead of the forthcoming White Paper.
On this page you can find the answers to the most frequently asked questions on English Devolution ahead of the forthcoming White Paper.
On this page you can find the answers to the most frequently asked questions on English Devolution.
If you have a question on the topic that has not been answered below, please email info@centreforcities.org.
In England, devolution refers to the transferring powers from central government to local governments (local and combined authorities). The concept centres around giving combined and local authorities more control over decision-making, enabling them to tailor policies to their specific economic, social, and geographic circumstances. This is compared to devolution in the UK to countries outside of England which has been about transferring powers to national institutions – Scottish Parliament, Welsh and Northern Ireland Assemblies.
Devolution has an important role in addressing the longstanding economic underperformance of places outside of London and the Greater South East, particularly the big cities, by giving them more powers and resources to improve their local economies and make a bigger contribution to the national economy.
Polling from areas where there are metro mayors has consistently shown that the public is in favour of devolution. Broadly speaking, there is significant public backing for devolution, but support is varied by region, and it often depends on factors like the perceived effectiveness of metro mayor, and the level of public awareness about devolution. Support is often rooted in the desire for more local control over decision-making on issues including transport, housing, health and jobs and a perception that local leaders put place before politics.
In 2021, 83 per cent of voters in metro mayor areas were in favour of more local devolution in at least one policy area according to a poll commissioned by Centre for Cities in 2021. More recent polling commissioned for Centre for Cities in 2024 showed a majority wanted more powers held at local level – particularly powers over housing and homelessness, transport, business support and crime.
Comparison with other countries in the G7 and OECD demonstrates how centralised decision-making is in the UK. While combined and local authorities in the UK have control over some important policies, they generally have less financial autonomy, fewer devolved powers and less decision-making authority than their counterparts in many other European countries. Examples of more empowered local government in Europe include:
Devolution can offer places significant benefits, including:
While devolution can offer significant benefits, there are challenges that must be managed:
Centralisation of government decision-making makes it harder for local economies to grow because a one-size policy doesn’t fit every place. What works for one part of the country might not work for all of it.
Centre for Cities’ research has contributed to a growing evidence base showing how the lack of local economic decision-making powers is responsible for poor local economic growth. It found that, under the existing structure of local government, places lack the incentives and policy levers to take decisions that would lead to greater economic growth.
The biggest impact of these constraints is felt in the UK’s big cities. The big cities outside of London generate 20 per cent of the country’s economic output. And as Centre for Cities has shown, the big cities perform a vital ‘ hub’ function that benefits their wider regions. But British big cities underperform their European counterparts in both of these roles. Seven of the UK’s large cities rank among the bottom 20 in the G7 for economic productivity, making the UK’s overall economic output far lower than it would otherwise be.
Giving cities more control over tax revenues and tax raising powers creates sharper incentives for them to support economic growth which in turn boosts revenues. There is evidence that in countries with low levels of fiscal decentralization, moderate devolution can have positive effects on economic development.
The OECD’s Database on Fiscal Decentralization tracks how tax revenues and expenditures are distributed across national and subnational governments in member countries. The data often shows that countries with higher degrees of fiscal decentralization—where regional or local governments control a significant share of public spending—tend to exhibit stronger regional economic growth. Example: In Germany and Switzerland, subnational governments manage over 40% of public expenditures, supporting higher regional productivity.
In contrast, the reduction in the rate of business floorspace growth in UK cities after nationalisation of business rates in 1990, suggests that centralisation acted as a disincentive for local authorities to permit more development and encourage business growth.
Other OECD research concludes that devolution can boost local and regional economic growth when paired with effective governance, fiscal autonomy, and policy coherence. However, it also emphasizes the importance of addressing regional inequalities and building institutional capacity to maximize the benefits.
Over the last decade, devolution in England has made significant strides, particularly in terms of transferring powers to cities and areas outside of London. While devolution in Scotland, Wales, and Northern Ireland has been more established since the late 1990s and early 2000s, England’s experience has been more gradual and localised.
In 2016, the Cities and Local Government Devolution Act entered law and enabled the institution of metro mayors and combined authorities to be established. It was the result of years of research and policy advocacy led by Centre for Cities which first made the economic case for directly-elected leaders in UK cities in 2006. One of the most notable trends in English devolution has been the introduction of ‘devolution deals’ – agreements between central government and groups of local authorities that transfer powers from Westminster to these newly established metro mayors and combined authorities. These deals generally involve the devolution of a range of powers, including transport, housing, skills, and economic development, with varying levels of financial autonomy.
The creation of directly elected mayors in several city-regions has also been a key feature of devolution in England since 2014. These mayors are directly accountable to local voters, giving them a mandate to govern and make decisions in the best interests of their area. Eleven places in England have mayoral combined authorities, covering roughly half the area of England including all of England’s largest cities. Devolution also relates to the way local government is funded. While there is no blanket increase in funding across the local government system, MCAs have gained control over specific funds including local growth funds, transport budgets (e.g. City Region Sustainable Transport Settlements) and skills funding (e.g. Adult Education Budget).
Despite progress, the devolution process has not been uniform. Devolution has been concentrated in certain areas, particularly urban areas in the North of England, while other areas, especially rural areas, remain outside the devolved framework. And while areas have control over some aspects of spending, fiscal devolution (control over taxes and revenue-raising powers) remains largely in the hands of central government, which restricts their financial autonomy.
Mayoral Combined Authorities typically have powers and responsibilities over skills, housing, transport and regeneration, with their specific powers varying depending on the content of the devolution deal reached with central government. Since the first MCAs came into existence in 2017, they have been busy delivering change at both the local and national levels.
Some of these changes are the result of tangible local initiatives, such as bus franchising in Greater Manchester, tram expansion in the West Midlands, and the apprenticeship system in Liverpool. Others are intangible but nonetheless a direct outcome of devolution, like their advocacy for their regions during the Covid pandemic. More examples of activity can be found here.
The Labour Government stated its aim of both widening and deepening devolution and committed to a Devolution Bill during this parliament in the King’s Speech in July. The upcoming English Devolution White Paper will further set out the Government’s plans for the Devolution Bill.
And, in setting out its revisions to the National Planning Policy Framework, Government also outlined plans to mandate mayoral combined authorities to write a strategic spatial plan.
Fiscal devolution involves giving local areas more autonomy by allowing them to collect and retain taxes, and determine how they are spent. This can involve local taxes – such as business rates retention, tourism taxes or a congestion charge and retaining a share of national taxes – such as income tax and VAT. Centre for Cities has outlined how Government could deepen fiscal powers in big cities by letting combined authorities retain a share of locally-generated income tax and full business rates as well as control of multiplier. It can also widen fiscal powers to the whole of the country by allowing all local and combined authorities to set council tax rates for their areas (based on regularly-updated property revaluations).
Provided fiscal devolution is designed in a way such that as an area’s economy grows the area gets to keep all or some of the increased tax revenues, it will enable local and combined authorities to gain direct benefits from decisions that lead to growth in the economy. With greater autonomy over how and how much money is raised locally, areas would also more flexibility and freedom to allocate funding to locally determined priorities rather than those determined by central government.
