The Guardian view on Labour’s fiscal devolution: the future of Burnhamism will play out in municipal England | Editorial

The recent budget unveiled by Treasury minister Torsten Bell has sparked debate over the future of fiscal devolution in local government. The changes, slated to take effect from 2028, include mayoral strategic authorities receiving a share of income tax receipts and allocating a larger portion of business rates revenue. These structural shifts could potentially be extended to cover 100% of business rates revenue by the end of the decade, alongside the introduction of a new overnight visitors levy.

Proponents argue that these changes will provide local authorities with greater certainty in funding and the ability to plan more flexibly based on locally determined priorities. This could lead to a more balanced distribution of resources and the ability to tackle regional inequalities. However, critics point out that the devil is in the details, particularly in ensuring that poorer areas with a smaller tax base do not lose out.

The move towards fiscal devolution is seen as a step towards restoring agency to local authorities who have been struggling under the dual impact of deindustrialization and austerity. It is anticipated that strategic authorities will be better equipped to assume control over priorities in sectors such as care, housing, and utilities. However, concerns remain about the scale of investment needed to fully realize these goals and address the £7bn funding gap faced by cash-strapped councils in the coming years.

Ultimately, the budget measures mark the beginning of a process that could lead to a genuine renaissance of municipal England, allowing communities to shape their own futures in a more equitable and sustainable manner.