Javid urges reorganisation and devolution post-COVID

By Heather Jameson | 23 June 2020

Council tax reform and local government reorganisation should both play a part in the post COVID economic recovery, former Chancellor Sajid Javid has said.

He has called for the devolution agenda to be revitalised, with increased powers and resources given to the devolved authorities.

It says: ‘Local leadership should play a major role in the expanded programme of public investment, and there should therefore be as much haste as possible in developing a renewed agenda for English Devolution; the promised White Paper must be published as soon as possible this year.’

It also calls for local bodies to be given powers to raise cash for themselves and increased borrowing capacity. It warned: ‘This cannot be about Whitehall waving its wallet over the heads of metro mayors.’

Mr Javid, who is also a former communities secretary, calls on the Government to commission a system-wide review of the tax system. But he warns it should avoid raising income tax, VAT or National Insurance and focus instead on tighten the reliefs ‘which unduly favour the wealthy’.

Describing the current system of council tax as ‘highly regressive’, he calls for a ‘full council tax revaluation over this parliament, with revaluations every three years’ and a reform of bands and rates to bring the tax in line with current property prices.

Chief executive of the Chartered Institute of Public Finance and Accountancy, Rob Whiteman, told The MJ revaluation was ‘a good thing’ but added: ‘The biggest single issues for local government is how is social care funding and what is the method of redistribution.’

While he said there was always a place for a property tax, he said: ‘the bigger the spread of taxes, the better.

‘Local government needs other sources of income…. Rather than being wholly reliant on property taxes.’

Sajid Javid’s report, After the Virus, calls on the Government to:

  • Revitalise the devolution agenda and increase the capacity of devolved authorities
  • Increased investment in infrastructure
  • Invest in left-behind regions
  • Reform of the planning rules
  • New fiscal rules
  • A relentless focus on jobs
  • Pro-growth tax reform
  • Free trade agreements
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Finance Devolution Reorganisation Sajid Javid Treasury Coronavirus
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