Allowing councils in England to administer and retain a greater share of locally generated taxes might seem like a step toward empowerment—but it’s really just another way for the government to shift responsibility onto local authorities while neglecting core funding needs. A new report funded by the County Councils Network (CCN) claims that devolving portions of income tax, stamp duty, the apprenticeship levy, and introducing a tourist tax could provide councils with an extra £4.4 billion annually. This illusion of extra money, representing roughly 10% of local budgets and up to £8.9 billion nationwide, masks the reality that these figures are piecemeal and don’t solve the fundamental underfunding faced by public services across the country.

The analysis conveniently highlights that county areas—home to about 45% of the population—contribute nearly half of the UK’s tax revenue, but crucially, it ignores how these regions are struggling to deliver essential services amid austerity and government neglect. With income tax contributions at 62% and VAT at 55%, these regions are asked to contribute heavily without guaranteed reinvestment—yet the proposal to let councils keep some of these taxes is presented as an incentive for local economic growth, ignoring the fact that devolving taxes without sufficient resources often leads to worse service delivery, not better.

Richard Roberts of the CCN argues that these proposals are “not new taxes,” but that’s a simplistic view. In reality, it’s another way for the government to offload financial responsibility onto local authorities—who are already stretched thin—while claiming to empower local decision-making. Such fiscal devolution, he says, would unlock growth and jobs, but neglects to mention that councils are already crippled by inadequate funding and rising costs. It’s a false promise that local councils can fix a system fundamentally broken by central government austerity and cutbacks.

This push towards fiscal control echoes the broader devolution rhetoric championed by Labour’s front benches, notably Deputy Prime Minister Angela Rayner’s calls for local leaders to seek devolution deals. But beneath the promises of local control lies a cliff of underfunding and unmet needs. The government’s White Paper and new Bills aim to create a patchwork of local powers, but critics argue these are incomplete solutions that mask the failure of central government to deliver on promises of “levelling up.” Instead of genuinely empowering local authorities with meaningful resources, these measures often result in greater bureaucracy and fragmented services.

Labour’s plan to extend devolution to cover transport, skills, planning, and energy may sound appealing, but it’s a distraction from the urgent need for proper funding. The reality is that London and other regional centres face significant funding shortfalls—London Councils, for example, are dealing with a £500 million deficit—yet these initiatives often serve political agendas more than practical needs. The promise that regional mayors will receive more powers to stimulate growth fails to address the systemic gaps in funding that cripple local economies.

Experts warn that devolution’s success depends not just on transferring powers but on the financial arrangements that come with them. Without fair and adequate funding, these initiatives risk creating a tiered system of public services, where wealthier areas thrive while poorer regions continue to lag behind. Given the historical neglect and underfunding, it’s clear that more powers without proper resources will only deepen regional inequalities, not solve them.

In the end, these initiatives are another layer of superficial reform—promising local growth while perpetuating the core issues of resource disparity and government neglect. The focus should be on ensuring that the central government properly funds and supports local authorities, rather than offloading responsibilities and pinning hopes on unproven fiscal experiments. Until real funding gaps are addressed, these devolution plans amount to little more than a political distraction from the urgent need for a fairer, more accountable system that serves all communities equally.

Source: Noah Wire Services