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Devolution plans: Chancellor must keep working with Mayor of London, says London First

London First has responded to the Chancellor George Osborne’s announcement on devolution to cities.

On the Cities Devolution Bill:

John Dickie, director of strategy and policy at London First, said:

“We welcome the Chancellor’s focus on devolving powers to cities. The government needs to continue to work with the Mayor of London to ensure the capital has the powers it needs – particularly over housing and transport.

“London is growing at its fastest rate in history and this rapid growth has left the city exposed and over-reliant on national whims to meet local needs.

“London’s inability to deal with its housing crisis is becoming increasingly clear, while Transport for London’s reliance on a settlement that is uncertain from one year to the next is a problem.

“Let’s be clear: more devolution for London is not a big ask. The UK is one of the most centralised democracies in the world – for example, London retains decision-making over only 6 per cent of the tax raised in the city, while New York keeps half.

On how and why devolution could benefit London:

David Leam, director of Infrastructure policy at London First, said:

“If the Treasury isn’t willing to commit to sufficient long-term funding for London infrastructure itself, then giving London government greater powers to spend tax raised in the city could make a big difference to the capital’s fortunes.

“It could increase certainty and range of funding streams on offer and – most importantly – strengthen the incentives for local government to take difficult decisions on local issues.

“They are more likely to support housing and infrastructure investment because they would see a greater share of the rewards and suffer fewer worries about what other parts of the country think.

“Boris Johnson has said deals could be done on a case-by-case basis, and there is potential there – for example the Northern Line extension to Battersea being funded in part by retention of additional business rates.

“The downside is that negotiating these kinds of deals still require cities to go cap in hand to the Treasury.”

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