A More Self-Governed London?

These are tough times for London. True, the city has weathered the harsh economic winds blowing through Europe better than most of parts of the UK. But unemployment is up, public services face painful cuts, welfare benefits have been reduced or abolished and prospects for growth look very uncertain. A quarter of young Londoners are unemployed.
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These are tough times for London. True, the city has weathered the harsh economic winds blowing through Europe better than most of parts of the UK. But unemployment is up, public services face painful cuts, welfare benefits have been reduced or abolished and prospects for growth look very uncertain. A quarter of young Londoners are unemployed.

On Monday and Tuesday this week The Centre for London and ippr think tanks staged the first London Policy Conference, an important gathering of London leaders and policy experts to discuss the challenges ahead. Speakers included Boris Johnson, Ken Livingston, Martin Sorrell, Greg Dyke, Andrew Adonis, Martha Lane-Fox, former mayor of Barcelona Juan Clos, and, from the US, New York Transportation Commissioner Janette Sadik-Khan and cities expert Professor Bruce Katz.

But how well positioned is London to rise to the challenge ahead? There is no doubt that London has a more effective government since it got a mayor. But as a new diagramatic analysis by the London Communications Agency, published at the London Policy Conference, shows London's system of government is bewilderingly complicated.

And while London has more power than other English cities over its own affairs, it lacks many of the powers its foreign counterparts take for granted.

To be fair, this government has continued in the footsteps of its predecessor in devolving authority to London. The mayor has been given an increased role in housing and policing, among other things. The London Communications Agency diagram captures this well.

But the criminal justice system, the benefits system, and the NHS are run largely or entirely from Westminster. On a rough calculation, public spending in London runs to about £72 billion a year. Only around 10% of that is spent by the Mayor. £12 billion is spend by London's local authorities. The lion's share is in the paws of central government.

Perhaps most importantly, the revenue raising powers of the mayor and local government are severely limited. The Mayor currently raises less than £1 billion, through directly taxing Londoners via the council tax 'precept', a flat and so deeply regressive tax.

Again, central government has begun to relinquish some control. Crossrail is being funded partly through a tax levied on businesses who will benefit from it, and a proportion of taxes raised in London's Local Enterprise Zone will go to the Mayor. The government is even considering allowing local authorities to keep a significant part of revenue they raise through business rates. But by international standards, it is all pretty thin gruel.

Yet increased powers could help London steer its way out of its difficulties. If local authorities knew that they would reap some of the rewards of business growth, they might do more to foster it. If the Mayor had more control over welfare in London, he might be able to design a system suited to London's particular circumstances - currently the 'poverty trap' is particularly powerful in London, with people in low paid jobs doing hardly any better than people on out of work benefits. If London had more control over health or criminal justice spending, it might be able to invest in joined-up, preventative policies, lessening demand on criminal justice and health services later on.

Interestingly an ippr poll published last week, to coincide with the London Policy Conference, looked at public attitudes to the way London is governed. It shows that while Londoner's aren't as supportive of devolution as the Welsh or Scots, they do on balance want to see more power devolved downwards, to the Mayor and even more to local authorities.

Let's hope that the candidates for this May's mayoral election make a good strong case for more self-government for London.