Councils in England could unlock £4bn yearly with tax devolution, but government stalls

Local councils across England are on the verge of a seismic shift in fiscal management that promises to deliver over £4 billion annually into local services—and yet, this government insists on clinging to a centralised, out-of-touch system that continues to stifle growth and accountability. A recent analysis commissioned by the County Councils Network (CCN) exposes how devolving fiscal powers—such as allowing councils to retain a share of income tax, stamp duty, the apprenticeship levy, and even introduce a tourist tax—could free local authorities to better serve their communities. But in the face of this opportunity, the government remains hesitant, sidestepping the urgent need for real local control and instead doubling down on a one-size-fits-all approach that hampers economic dynamism.

The report reveals that 37 CCN councils, representing about 45% of England’s population and responsible for nearly £390 billion in tax revenue in 2022/23, are already significant contributors to the national coffers. By empowering these councils to retain their share of income tax growth—an estimated £3.8 billion a year—they could unlock vital funding for transport, housing, and skills development, all without raising additional taxes for residents. Furthermore, the proposal to allocate half of the stamp duty on new homes (£237 million), implement a modest tourist levy (£2 per night generating £209 million), and dedicate 10% of apprenticeship levy funds (£120 million) could total around £4.4 billion annually—roughly 10% of their current budgets. This is a pragmatic, growth-oriented approach that the government ignores at its peril.

Yet, instead of embracing these reforms, ministers obstinately cling to traditional revenue streams, claiming that extra taxes are off the table—a misguided stance that ignores the immediate need for decentralisation. Such an approach is short-sighted and out of touch with local realities. Richard Roberts, CCN’s economic growth spokesman, rightly pointed out that “using existing taxes more effectively” could unlock the economic potential of the counties—if only the government had the political will to empower local authorities rather than micro-manage them from Westminster.

This push for fiscal devolution aligns with broader reform efforts, but the government’s lukewarm response suggests a failure to grasp the scale of local aspirations. Deputy Prime Minister Angela Rayner’s vocal support for devolving decision-making powers is commendable, yet practical policy remains elusive. The White Paper on English Devolution hints at the possibility of local pilots and increased autonomy, but concrete action continues to lag behind rhetoric. London Councils, for example, describes the current fiscal framework as “limiting”—a passive way of acknowledging the problem when what is needed is a radical overhaul that prioritises local needs over central control.

Devolving tax powers is more than just a cash boost; it’s about restoring sovereignty to local communities so they can genuinely shape their futures. The capital’s leaders see this clearly, warning that current centralised funding models hinder London’s economic potential and fail to address persistent issues like unemployment and poverty. As they advocate for powers over local taxes, including tourism levies and business rates, it’s evident that the entrenched system isn’t fit for purpose and only entrenches regional disparities.

The debate isn’t confined to England. Scottish regional leaders and business interests have long called for greater devolution, emphasizing that current arrangements hamper growth and overlook the region’s true potential. Meanwhile, London’s Mayor continues to argue that decentralising taxation is vital for the city’s economic recovery—yet our government seems content to ignore these calls, preferring sadly to line their own pockets with centralised revenues, rather than empowering local areas.

As Parliament drafts the Devolution and Community Empowerment Bill, the opportunity to fundamentally overhaul how local services are financed should be embraced—not sabotaged. The question remains: will this government finally listen to the voices demanding real change, or continue to saddle local communities with an outdated, inefficient system that stifles growth? The truth is, the status quo serves Westminster’s interests rather than those of hardworking communities. True devolution would allow local areas to thrive, create jobs, and improve public services—if only the government was brave enough to let go of its centralised grip. But don’t hold your breath; the relentless push for control suggests that local empowerment remains well down the list of government priorities.

Source: Noah Wire Services

Noah Fact Check Pro

The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.

Freshness check

Score:
9

Notes:
The narrative is based on a recent report commissioned by the County Councils Network (CCN), published on July 16, 2025. This indicates high freshness. The report has been covered by multiple reputable outlets, including The Standard and Public Sector Executive, suggesting originality. No evidence of recycled content or disinformation was found.

Quotes check

Score:
8

Notes:
The report includes direct quotes from CCN’s economic growth spokesperson, Cllr Richard Roberts. These quotes appear in multiple reputable outlets, indicating they are not exclusive to the narrative. No significant variations in wording were found.

Source reliability

Score:
9

Notes:
The narrative originates from the County Councils Network, a reputable organisation representing England’s largest councils. The report has been covered by multiple reputable outlets, including The Standard and Public Sector Executive, indicating high reliability.

Plausability check

Score:
8

Notes:
The claims made in the narrative align with the findings of the CCN’s report, which has been covered by multiple reputable outlets. The proposed fiscal devolution measures are consistent with ongoing discussions about local government funding and devolution in England. No evidence of implausible or unsupported claims was found.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary:
The narrative is based on a recent, original report from a reputable organisation, with consistent and plausible claims supported by multiple reputable outlets. No significant issues were identified in the checks conducted.