Commission meeting with Henri Murison, Chief Executive, Nothern Powerhouse

The Commission met with Henri Murison, chief executive of the Northern Powerhouse, on 6 March as part of its inquiry into the empowerment of local government. 

We talked about democratic renewal and recent developments. Henri Murison thought that the Metro Mayoral model had worked well but that mayors in local authorities were not a model with as much impact or case for further extension. Metro Mayors provide a visible head and oversee a cabinet of council leaders from their geographical base providing additional scrutiny, accountability and liaison which had developed from the needs of transport and networks. He thought that the idea of regional assemblies was dead. He said that there is a lack of governance safeguards in London to give local authority leaders a direct relationship to London Mayoralty which needs addressing. 

It appears that mayors will simply get a single settlement for a range of their services, for example to develop skills which will no longer be in the remit of government departments. This is alongside Level 4 devolution for Greater Manchester, Liverpool City Region, West Yorkshire and South Yorkshire - but not as yet Tees Valley.  

The Commission agreed that there was a need to reinvent something like the Audit Commission to carry out financial scrutiny but that would also look at effectiveness and good governance. This should be an independent body and not part of government, particularly as it is possible that mayors may be granted increased powers over education as has begun in the North East trailblazer. 

There is a creative tension between who can do what at what level, the job of government is to set standards and expectations, and local government should have resources and flexibility. 

Finance is the biggest challenge. Henri Murison suggested that there should be an independent process to decide financial settlements. Unless we sort out local government finance the whole edifice will crumble. 

Some ideas for reform of local government finance were discussed. Henri Murison suggested local councils should have more discretion over council tax bands, even though council tax is inherently regressive. The problem is that the amount people pay bears little relationship to the services they receive as the money goes almost entirely on statutory responsibilities like child protection. 

One idea might be for a super-band of council tax that is redistributed to poorer areas. 

We could have a punitive land tax on foreign owned land. 

Stamp duty could be allocated immediately to local councils. 

A tourism tax, including for short term rentals like AirBnB, common in other countries could be locally imposed. The London tax would have to be shared across Greater London. 

A land value tax could be considered. 

Labour has promised reform of the business rate system. 

Road pricing is likely to be introduced. 

We need to think about a wealth tax. 

One questions is whether local councils could become financially independent with money no longer going through central government. 

Apart from finance we also need to look at developing talent and skills in local leaders. 

Henri Murison said that central government needs to see the regions and localities as part of a combined effort at governance of the country.