The Mayor of London, Sadiq Khan, has welcomed the publication of a new London Devolution Agreement in the Budget.
The Mayor says this marks a major step towards London getting the control it needs to grow and protect the capital’s economy from the uncertainty of Brexit.
Sadiq Khan says he has been negotiating with the Treasury and Downing Street for a deal for London that would give the capital more powers and tools it needs to safeguard jobs, wealth and prosperity.
The London Devolution Agreement announced by Chancellor Philip Hammond builds on commitments made in last year’s Autumn Statement, which included a £3.15bn deal to build 90,000 homes in London and the devolution of adult skills funding and employment services support.
Further devolution granted in the latest budget include the pilot of a new Development Rights Auction Model for funding future infrastructure projects. This new funding model could provide significant funding towards future projects – hopefully allowing them to be built quicker and with less reliance on Government funding.
The Government will explore options for granting London more powers over the administration of business rates within London. This includes supporting the voluntary pooling of business rates in London, subject to appropriate governance structures being agreed.
The London Devolution Agreement also confirmed the devolution of new powers to allow the Mayor and TfL to reduce congestion, and a continuation of work to help employers take advantage of the opportunities offered by the apprenticeship levy and to explore options for greater local influence over careers services, with a view to better matching skills provision and careers services with local needs and priorities.
However, the Mayor has voiced his disappointment that the Chancellor did not use the Budget to provide additional funding back Crossrail 2.
While he welcomed moves by the Chancellor to reduce the impact of business rates increases and overhaul the business rates system, Sadiq does not believe that today’s proposals go far enough and continues to warn that many London companies could be forced out of business as a result of the new charges that come into effect next month.
The Mayor of London, Sadiq Khan, said: “Today’s London Devolution Agreement shows that we get the best deal for Londoners when we put party politics aside and work closely with the Government.
“I am pleased that the Chancellor has recognised that giving London more control is vital if we are to protect jobs and investment in the aftermath of Brexit.
“London has a bigger population than Wales and Scotland combined, but we have far less control over how taxes are spent and public services are run.
“Giving London the ability to invest more in building crucial new infrastructure and devolving control of business rates will help increase economic growth and improve productivity.
“However, London did not get everything we needed today. I am disappointed that the Government did not use the opportunity to fully fund our police force or pledge their support for Crossrail 2.
“And businesses across the capital still face a clear and present danger to their future as a result of business rates increases despite the proposals outlined by the Chancellor today.”
Claire Kober, Chair of London Councils said: “London government – the Mayor and the boroughs – have a track record of working together to deliver for the city. We are delighted that we will now be able to use the London Devolution Agreement as a springboard to enhance our plans to improve the lives of Londoners.
“As we’ve long argued, this promises local people the power to set out a new path for delivering both economic growth and excellent public services in the context of a continued squeeze on public finances.
“However, despite today’s positive news, we believe that there is more room for further transfer of power to both London and cities across the UK, and we will continue to argue the need for Government to properly fund public services.”
Many of London’s global competitors enjoy much more control over public spending and services in their cities. New York keeps around 50 per cent of the taxes raised in the city and Tokyo keeps 70 per cent.