In the past week alone two reports from the new Key Cities Group of 22 medium-sized English cities and Labour's Smith Institute have both urged substantial fiscal devolution.

The latter in particular argues that once the Scottish referendum is out of the way in September there will be huge pressure on politicians to offer English cities greater freedoms.

Greater Manchester after all has a larger economy than Wales.

The CLG select committee has also just completed a call for evidence for its own inquiry into how cities might receive more fiscal powers.  Within the written evidence, published last week, there are clear common strands.

These are that the easiest taxes to be devolved, that local government is much better at managing the skills and employment agenda than central government and can save money in the process, and that devolution need not be one-size-fits all – whether for core cities, key cities, counties or combined authorities.

The Department for Communities and Local Goverment in its submission argues it has already devolved ‘significant functions' to the Greater London Authority, Local Enterprise Partnerships (LEPs) as well as through City Deals, New Homes Bonus, Enterprise Zones and localised business rate.

It also cites economic investment funds, localised skills funding, earn back, localised youth contracts and rail devolution as other examples, as well as the £3.8bn pooled health and social care pot, the Better Care Fund, operational from 2015/16.

This process, it adds, is still ‘bedding in' and now is not the time for further fiscal devolution.

Even then the key tests will be whether more devolution supports deficit reduction, has cross-party support, can be supported by evidence and not have a detrimental impact on the rest of the UK.

The Local Government Association, drawing on its Rewiring Public Services campaign, calls for place-based finance that gives areas greater control over their tax revenue and spending, five year funding settlements and scrapping the Barnett Formula as well as supporting a single local public services department in Whitehall.

The County Councils Network (CCN) wants a greater devolved role for counties maintaining that the devolution debate has tended to focus too heavily on urban areas.

Bearing in mind that even Sir Richard Leese, the leader of Manchester City Council, sees no reason why combined authorities should not exist in rural areas, the CCN's request may not necessarily be at odds with the cities' agenda.

The Mayor of London's submission points out that barely 7% of tax is retained by the Mayor and London boroughs while in New York the figure is 50%.  The proposals by the London Finance Commission to retain property taxes plus removing ceilings on borrowings would give the GLA and boroughs control over an extra £5bn of tax revenue but still leave the Treasury controlling 88% of the city's overall tax base.

Devolution would also promote growth.  The GLA and boroughs should also have scope to bring in and retain new taxes such as a hotel bedroom tax and an undeveloped land tax.

Some 41% of all residential stamp duty in the UK is collected from London homes and 58% of all stamp duty on properties worth over £500,000 comes from London.

Stamp duty is an ‘imperfect' system with steep cliff-edge thresholds so ‘the case for reform is therefore compelling,' says the Mayor's submission.

The Greater Manchester Combined Authority (GMCA) says that while the economy has grown the skills base has not kept pace while the gap between the cost of public services and the tax generated within Greater Manchester has still not yet been filled.

Despite spending cuts total public sector spend in Greater Manchester actually increased between 2008/9 and 2011/12 from £21bn to £22bn due to increased demand in welfare, health and social care.  A greater proportion of public spending is now spent on the costs of dependency and less on opportunities to increase growth and reduce demand.

The GMCA argues that it needs greater fiscal control in order to both deliver growth and reduce the costs of dependency, especially by increasing skills.  It calls for a new settlement between central and local government which incentivises local investment, rewarding economic growth and reducing dependency.

Its experience as a community budget pilot shows that with greater control over local public sector agencies it can reduce dependency and demand through public sector reform.

Two other cities, one a core city and the other a key city, also make their respective cases for devolution. of the Key Cities Group, says that the Government's current approach to devolution is ‘confusing and lacks coordination.'

Devolution needs to go beyond both core cities and LEPs to medium-sized cities even those such as Preston, Norwich or Worcester that exist within county council areas.  It should also come with legislative freedoms and flexibilities.

All programmes should be devolved and delivered through existing local areas unless a business case can be made otherwise.

Sheffield City Council notes that by 2015 government grant funding to Sheffield City Council will have fallen by 50% since 2010, evidence of the Government's lack of regard for local government's role.

Yet local areas are best placed to use their knowledge to bring services like health, social care, welfare and housing together through single budgetary frameworks such as a city-wide budget.  Local areas are also better at tackling employment and skills.
Devolution need not be one-size-fits-all –though its primary focus should be through cities and the functioning economic or travel to work area.

The Sheffield City Region or combined authority of nine councils will be up and running in April.

The London Finance Commission recently urged greater fiscal autonomy for the capital, although arguing that the principle could be applied to core cities.

Its chair, Tony Travers of the LSE, also gave evidence to the select committee.  He pointed out that local government finance has become ‘significantly more centrally-controlled' since the 1960s with cities in particular hamstrung by a centralised funding system.

In comparison to other Organisation for Economic Co-operation and Development (OECD) countries, the UK has the most centrally-controlled public finance system. 

The taxation attributable to sub-national government (local government and any regional or state tier) as a share of GDP is 16.1% in Sweden, 10.4% in Germany, 8.8% in Spain, 6.5% in Italy, 4.6% in France and 1.7% in the UK (which is entirely ‘council tax'). Even with localised business rates from April 2013 added in, the UK's proportion only rises to 2.5%.

The UK is also unusual for having just one tax at sub-national level in council tax.