Mayor of the East Midlands to get income tax to make lives better in every postcode

Mayor Claire Ward has welcomed the biggest transfer of power from Westminster in a generation. The Prime Minister has announced today the new roles of mayors which will give communities greater control over the decisions that shape jobs, transport, housing and public services in their area.

As part of the largest package of financial powers ever offered to English mayors, mayors will receive a share of income tax revenues for the first time.

This means when places create jobs and grow their economies, they will now keep more of the rewards – giving local leaders like Mayor Claire new powers to invest in what matters most locally.

Mayor of the East Midlands, Claire Ward, said: “For two years, I have championed our region to ensure that everyone in the East Midlands has the opportunity to thrive.

“But if we are serious about making lives better in every postcode, we need decisions about local issues to be decided by local people.

“This new share of income tax means that when our economy grows, more of that success stays here in the East Midlands.

“A prime example is our city of Derby. It is the highest earning area outside of London, but this is not reflected in growth results.

“This money gives us the opportunity to invest even more in the things that matter: investing in our communities and high streets, supporting businesses to grow, creating more social housing and better transport.

“I have already shown what can be achieved when investment is trusted to local leaders, and these new powers will help us go even further. Every pound we can reinvest locally is another opportunity to create a stronger, fairer East Midlands for current and future generations.”

In his second week in office, the Prime Minister will tell his Cabinet that it is time to launch a new era of devolution – taking power and decision-making out of SW1 and putting it closer to people’s lives.

Prime Minister Andy Burnham said: “I said we’d take power out of Westminster and carry it into every postcode in the country. Today, we make good on that promise.

“Under our plans, more of the taxes raised in a community will stay in that community. Soon, every local leader will have the power and resources to improve public transport, build homes and create jobs.

“I know what it’s like to be ignored by politicians in Westminster. I’m not going to make that same mistake now I’m PM.

“The whole of government will now pull together behind the people and places that desperately need our support. This is how we’ll bring back hope and bring power home to you.”

The plans will end the Whitehall-first culture that has held back local areas for decades, forcing departments to justify why powers should stay in Westminster rather than be handed to local leaders.

By shifting power, funding and decision-making closer to people, the changes will give every part of the country the tools to create strong local economies, improve public services and shape its own future.

The Prime Minister believes the country’s towns, cities and communities can drive far more growth and opportunity if they are given the tools to do so. The East Midlands already has a strong track record of delivering results:

• Over £750m has been invested in transport improvements across the region, with £121m for local authorities to maintain and repair roads as well as better public transport and walking, wheeling, and cycling routes on the way.
• Skills, employment and opportunity have been placed at the heart of the Mayor’s agenda, with more than 27,000 adult learners supported, more than 2,800 young people gaining quality work experience, and 1,600 unemployed young people supported into education, employment or training.
• The Brownfield Housing Fund programme is already supporting the delivery of 1,765 homes across the region over the next four years, with thousands more expected through the first three phases of the scheme.
• Millions of pounds has been invested to unlock stalled regeneration schemes including the Derby Assembly Rooms and Nottingham’s Broad Marsh site.

From next spring, mayors will begin retaining a greater share of locally generated revenues, starting with business rates. Further details on this and on income tax retention will be set out in a roadmap at the Budget and will be underpinned by the government’s firm commitment to fiscal discipline.

Over time, local areas will move away from dependence on Whitehall grants and towards funding that rewards local growth.

Chancellor of the Exchequer, John Healey MP said: “The people who best understand what skills employers want, what transport an area needs and where investment can make the biggest difference are those who live there.

“For the first time we’re giving Mayors a share of income tax so communities directly benefit when their economy grows – passing power out of Westminster and driving growth in every postcode. 

“This is the way we start to build new hope and advance the working people of this country.”

The ambition is to extend the benefits of devolution across the whole UK, working with devolved governments and local leaders to give communities more control over their future.

Secretary of State for Housing, Communities and Local Government Angela Rayner said:  “This is the first step in our plan to rewire this country and build a better future, where power is no longer hoarded in Westminster but is put back in the hands of local people – where it belongs.

“Our devolution revolution is about bringing an end to the begging-bowl culture of the past, and instead making sure our local leaders have the tools they need to drive the change that communities have been crying out for.

“We need every region to be firing on all cylinders if we want good growth in every postcode, and we will do everything in our power to make that a reality.”

The reforms will be driven by a strengthened No10 North operation, working with mayors, local leaders and other partners to remove barriers to growth, accelerate delivery and ensure government is better connected to communities across the country.

Local leaders will gain greater control over the services that shape people’s lives, including housing, transport, skills, employment support and public services.

This includes powers to:

• Bring rail and bus services under greater local control, helping introduce integrated ticketing and more reliable services.
• Build more homes where they’re needed and unlock stalled development sites by giving local leaders stronger planning and regeneration powers and more devolved funding.
• Get local transport schemes, trams and metros built faster by removing Whitehall barriers and speeding up approvals.
• Give mayors control over 16-19 funding and employment support, so young people can train for the jobs local employers need and people out of work can get tailored support back into employment.
• Back local industries and innovative businesses, and attract investment, creating more well-paid jobs.
• Where power is devolved, Whitehall resource will follow, giving devolved leaders the resources they need to drive change closer to home

Immediate reforms will remove barriers that prevent locally led transport projects from going ahead, activate new planning powers for mayors and give local areas greater flexibility over how funding is spent.

Giving local leaders greater control over funding and investment decisions will help unlock opportunities that have too often been overlooked by a Whitehall-led approach.

The UK cannot rely on success in a small number of places alone. By giving more communities the tools to succeed, these reforms will help spread opportunity more widely, raise living standards and ensure more people feel the benefits of economic success in their everyday lives.