Fiscal devolution

Report by: Localis

Author(s): Various Authors

July 16, 2020

This latest report from UK think tank Localis looks at fiscal decentralisation to properly fund local services and infrastructure.

From the crises in elderly care and youth crime to the desperate challenge of building enough homes across the country, the need to properly fund, so as to properly deliver valued local services and infrastructure has never been clearer to the public. In this environment, the case for giving our local authorities greater powers to raise revenues to fund vital place-based public services and infrastructure investment is seemingly unanswerable. Barely a week passes without a new well-evidenced piece of research decrying the overcentralized nature of local spending and national revenue collection. The arguments have been made. The incontrovertible evidence for granting fiscal freedom keeps stacking up in ever taller piles of reportage, and everyone seemingly agrees with the argument. Up and down the country, people want to see the vulnerable looked after in local settings, pillars of community life, like the library maintained and new roads and homes built to support growth for future prosperity.

Fiscal devolution: adopting international approaches is a comparative study of the Netherlands, Germany and Switzerland, aimed at showing how fiscal decentralisation is practiced by our near continental neighbours. The report looks at European local authorities, both metropolitan and non-metropolitan, explaining how they manage fiscal devolution and how their tax bases fit within the wider context for decentralisation at regional and national level. By exploring the experiences of colleagues abroad, we hope to demonstrate different ways that tax-and-spend might function within the context of English local government finance to bolster the local state’s rather sparse fiscal armoury.