The transfer of local property taxes must form the main plank to devolution at city level, an influential think tank reported today.

Interim findings of a ResPublica study commissioned by the Key Cities group of 26 mid-sized cities called for local control of council tax levels, business rates, stamp duty as well as local retention of VAT receipts.

Other elements of fiscal freedom demanded in the report entitled ‘Power, people and places: A manifesto for devolution to Britain's key cities' included permission to borrow on Housing Revenue Account and the extension of ‘earn back' deals for investment in housing and transport.