Leeds Council must be given full control over its own finances to help the city grow, its chief executive has told MPs.
Tom Riordan told a Commons select committee in Parliament last night that major cities need to be freed of Whitehall controls to allow them to support development locally and boost the wider economy.
“We haven’t got the economic growth that we should have in a country of our size,” he said. “With the right capacity and resources in place, (the major cities) could help not just our own areas, but UK PLC as a whole, and the UK taxpayer as a whole.”
Mr Riordan said the current system of town hall grants from Whitehall should be ditched, with councils given control over locally-raised property taxes such as business rates and stamp duty instead.
“We’ve got to re-think the way that financial accountability works and come up with new ways of working,” he said.
The Government is under mounting pressure to quicken the pace of devolution to the English regions, with recognition growing that England remains one of the most centralised states in the developed world.
Labour leader Ed Miliband and his Shadow Business Secretary, Chuka Umunna, have suggested the Opposition party is planning a major policy announcement on handing new powers to the English regions later this year.
Boris Johnson, the Conservative Mayor of London, said in December that major cities should have the power to raise their own finances. York Council has called for a Royal Commission to assess the best way of handing powers to local areas.
The Government insists it is committed to handing powers to local areas, pointing to the so-called ‘City Deals’ it signed with Leeds and other large cities in 2012 to give them more control over local spending on transport and infrastructure.
But Mr Riordan said the new powers did not go far enough.
“The City Deals are a welcome first step – but if I’m being honest, it doesn’t feel like devolution,” he said.
“It doesn’t feel like decentralisation given the amount of bureaucracy there’s been around it, and the fact we haven’t got exactly what we thought we’d agreed in the deals. I think something more significant is needed.”
Wakefield Council leader Coun Peter Box, also appearing before the Commons local government committee, said it was vital that smaller towns and cities are not left behind.
“It’s not acceptable to say that it would happen in certain areas and not the rest,” he said. “The genie is out of the bottle in terms of devolution, you can’t put it back in. To say only the core cities would get it would seem to us to be perverse.”