UK Moves to Devolve More Tax Revenue to Regional Mayors Amid Accountability Concerns

The government is preparing a white paper on “rewiring the state” that will transfer additional income-tax revenue to England’s regional mayors. Ministers are weighing mechanisms to prevent misuse of the new spending power, including a Westminster select committee, tighter reporting rules and a dedicated audit body. Treasury select-committee chair Meg Hillier has argued that “clear, transparent mechanisms” are essential to hold mayors accountable between elections. The proposal also contemplates a recall process for spendthrift mayors, similar to that used for rule-breaking MPs.

The GuardianTransferring power out of Whitehall: Don't devolve fiscal risk when 'rewiring'

Analyses of Greater Manchester illustrate the fiscal challenge. In 2012-13 the region generated £17.7 bn in tax revenue against £22.5 bn in public spending, leaving a £4.8 bn gap. By 2021-22, spending rose to £41.2 bn while tax revenue reached £26.2 bn, widening the nominal gap to £15 bn. The share of expenditure not covered by locally attributed taxation grew from 21 % to over 36 % in the same period, while spending increased 83 % versus a 48 % rise in revenues.

Transferring power out of Whitehall: Don't devolve fiscal risk when 'rewiring'

• Treasury select-committee chair Meg Hillier stressed that any devolution must be matched by “strong, clear scrutiny structures” to avoid reckless delegation of power.

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• IFS devolution expert David Phillips warned that without “equalisation payments,” richer areas such as London could pull ahead, urging the government to define an acceptable funding gap between “winners” and “losers.”

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• Greater Manchester Mayor Andy Burnham has framed devolution as the core of his premiership, pledging greater mayoral control over technical education, employment support and major transport investment, while acknowledging that redistribution and national standards will remain central-government responsibilities.

Transferring power out of Whitehall: Don't devolve fiscal risk when 'rewiring'

• “It is absolutely critical, though, that strong, clear scrutiny structures are established which match this move to localism. It would be reckless to hand out new powers without ensuring there are transparent mechanisms to hold mayors to account for their decisions.” — Meg Hillier, the chair of the Treasury select committee

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