Politics1 min read

Mayors will be free to use share of tax to give residents grants

By · Published by Everything Blog

In short

Under the newly announced fiscal reforms, English strategic authority mayors will gain broad discretion over allocated revenues from retained business rates and basic-rate income tax. While leaders like Conservative Tees Valley Mayor Ben Houchen plan to direct funding back to residents through voluntary application grant schemes, the Treasury notes these are not official tax rebates. Opting to issue direct payouts will reduce available capital for local public services like housing and transport. The wider initiative is backed by Prime Minister Andy Burnham and phased in over several years alongside new tourism levy powers.

Key points

  • Mayors can choose to distribute local tax revenues directly to businesses and residents t…: Mayors can choose to distribute local tax revenues directly to businesses and residents through application-based grant programs.
  • Diverting retained tax shares toward direct resident grants will leave local authorities…: Diverting retained tax shares toward direct resident grants will leave local authorities with less money for regional transport and housing.
  • Most of England's 14 strategic authority leaders welcomed the devolution, though several…: Most of England's 14 strategic authority leaders welcomed the devolution, though several are waiting on further specifics before pledging funds.

Sources checked by our analysis pipeline: 1

- Published

English regional mayors due to be handed a share of tax revenues by central government will be free to use it to give cash grants to individual residents and businesses, it has emerged.

In his Budget, Chancellor John Healey unveiled plans to allow mayors to keep some cash from income tax and business rates collected locally, describing it as "the most radical act of devolution in a generation".

Prime Minister Andy Burnham wants local leaders to be given more control over how money is spent in their areas to boost economic growth and services.

But Conservative Tees Valley Mayor Ben Houchen says he has been given assurances that he will be able to give grants to local residents instead.

Lord Houchen told the BBC he is working on a voluntary scheme that would give local residents the opportunity to apply for a share of the tax distributed to his region.

He said Treasury officials had told him this would be acceptable within the government's rules around the devolution of funding.

"It's a technical point around spending decisions," Lord…

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