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Stephen Hughes gives Boris a helping hand

Stephen Hughes gives Boris a helping hand

🕔15.May 2013

Birmingham city council chief executive Stephen Hughes has been helping the Mayor of London Boris Johnson to secure a better financial deal for the capital from the Government, it can be revealed.

Mr Hughes played an important role in the London Finance Commission, set up by Mr Johnson, with the aim of convincing Ministers that the London should have substantial devolved powers to raise and spend a far higher proportion of taxes raised in the city.

The commission, chaired by local government expert Prof Tony Travers, concludes that London government could better promote its own economic development by devolving financial and fiscal control rather than relying on the current formula of majority Government grant.

The findings are similar to demands for devolved finances put forward by the Greater Birmingham and Solihull Local Enterprise Partnership.

It is possible that, if the Government accepted the London commission’s recommendations, similar financial devolution could flow to major UK cities including Birmingham.

The commission found that only seven per cent of tax paid by London residents and businesses is redistributed through the city’s councils.

More than 90 per cent goes to the Treasury for general government spending, while 74 per cent of London’s funding comes directly from central government grant and is outside the control of councils and the mayor.

Other major world cities enjoy far more control over their own finances. New York raises about 60 per cent of its funding through local taxes, relying on only 30 per cent from government grant.

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