More 'bang for our buck': Should London's mayor have more power?

• Above: John Dickie from BusinessLDN makes the case for more powers for London's mayor

London should have more control over its destiny with greater devolution and more power handed to the Mayor of London, a business group has said.

BusinessLDN, which represents some of the capital's biggest companies, said London had a huge tax surplus, which means the city pays more in tax than is spent here.

The group said the way money was partly spent in London was "bonkers" and devolution would help deliver better "bang for our buck".

"London generates a tax surplus of getting towards £40bn pounds a year," said Chief Executive of BusinessLDN, John Dickie.

"It's one of the richer regions of the country and some of that money should be spent on general public services elsewhere.

"But what is just bonkers is that generating that kind of tax surplus from one of the most vibrant economies in the world.

"London government has to go cap in hand to central government if it needs to replace some Tube trains.

"If motors on the Central Line don't work, we haven't got the money to fix them.

"We haven't got the ability to put in place a proper capital program for five years or ten years, and that's what needs to change," Mr Dickie explained.

London has had a mayor since 2000 to run key parts of the capital with a budget of around £21bn to improve economic and social development.

The position is currently held by Sadiq Khan who has been in office since 2016 and is bidding for a record third term at City Hall.

Other parts of the UK such as Manchester and Liverpool also have elected mayors with varying degrees of power.

In London the mayor's focus is on issues such as transport, with the power to set fares as well as policies such as the congestion charge and ULEZ.

The mayor is also responsible for the Met Police, affordable homes targets and supporting London's culture and creative industries.

John Dickie said a lot more could be achieved in the capital if the mayor had more control over where to spend money.

He added: "I think the argument has got to be made really strongly by all parts of London, by politicians, by business, by civil society, is that in very straitened times where tax levels are high, when public services are squeezed, devolving more spending to local government to London government will deliver both better spend.

"So we'll get better bang for our buck, we'll get better public services and will also enable us prioritize to spend on the things that can really shift the dial on jobs and growth in London.

"We've had regional government now in London for over 20 years. We've had local government of one kind of another in London for centuries.

"I think we've got the capabilities to make really effective use of devolution in the city. I think we could drive jobs, growth and better outcomes if we more control over our own destiny.

"I think the central priority any mayor will face is having the resources to deliver against the big challenges the city faces that they're responsible for - housing, transport, crime, policing.

"And so getting the resources, getting control over resources in London must be the central priority for any incoming mayor."

Making the case for more powers is nothing new and successive mayors have already made the case.

With other mayors in other parts of the UK having more power in some areas it's likely whoever wins the London mayoral election on 2 May may want a wider remit.

Devolution can bring with it the benefits of making political decisions that work for people locally, such as the introduction of the Oyster card in London.

Policing can also be more localized if policy set locally which allows a more nuanced local approach to fit local circumstances, campaigners argue.

Tony Travers from the London School of Economics said if London took more of its tax surplus it would rely less on grants from central government.

"Probably the best way would be to allow London access to more of the taxes that are set here, as happens in Scotland and Wales, you'd offset that by cutting central government grants to London," Tony Travers said.

"But London would control more of the money that is raised here and could use it in a way that made sense in London rather than national government spending money on London, just as part of spending from John O'Groats to Land's End."

A Department for Levelling Up, Housing and Communities spokesperson said: "The Government has provided over £6 billion of funding to Transport for London to enable it to operate, maintain and invest in London’s transport network since the beginning of the pandemic.

"It is right that any future requests for capital funding are considered in the context of the wider financial and funding environment."

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