Allow cities to raise taxes, says academic

29 Jan 19

Cities should be given greater tax raising powers to meet growing demand for services amid shrinking budgets, says a leading academic.

Professor Tony Travers told an event organised by the Centre for Cities think-tank that central government must allow local authorities to raise funds.

“The very services that civic government came into existence to provide are now being removed,” the director of LSE London said.

“Government must give local authorities the ability to raise tax locally – money would be used best at a local level if it were raised and spent there.”

Travers was speaking at the launch of Centre for Cities’ report Cities Outlook 2019 on Monday where panellists including Nick Forbes, leader of Newcastle City Council,  and Abi Brown, deputy leader of Stoke-on-Trent City Council, discussed the impact of austerity on local government.

The panel noted that while local government spending has fallen since the onset of austerity, demand on councils to provide essential services has soared.

Adult social care is one area in which demand has risen dramatically, and councils are now allocating more of their budgets to providing these services.

Brown said: “75% of our budget is now spent on 5% of our population – a sustainable funding system is needed for social care.”

Forbes told delegates this disproportionate spending pattern is necessary to protect the most vulnerable in society, but has come at the expense of other non-statutory services.

“I have had really difficult conversations with the residents in my city who are angry about losing things like libraries, but these decisions were made because we are focusing on protecting those that are most vulnerable,” he said.

“We are now getting to the point where services for the vulnerable are going to have to take a hit.”

The panel mooted the idea of a tourism tax – as is being considered in Edinburgh – which Forbes called “a no brainer” because it raises funds at no cost to residents.

Travers noted that localised taxes already exist in the UK, and pointed to the congestion charge in London.

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