1) Business Rate retention pilots |
Yes
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The Non-Domestic Rating (Rates Retention) and (Levy and Safety Net) (Amendment) Regulations 2017
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Ability to retain 100% of Business Rates revenue growth locally.
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Only available in pilot areas – agreement over split between CA and constituent councils varies.
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Low - Moderate
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Cannot vary structure of the tax itself, but action to increase tax base will lead to higher revenues.
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Moderate
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In principle, pilot areas are free to spend as they wish. However, there have been offsetting reductions in other finance sources, meaning that there are existing spending pressures that will need to be met.
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B
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2) Business Rate supplement |
No (forthcoming) |
Business Rate Supplement Act 2009 and intended to be revised by Local Government Finance Bill 2016-17 (fallen). But MHCLG working to ensure that it will be extended to Mayoral CAs who agree that they want it. |
Ability to ask for additional 2p in the pound from local businesses to raise funds for projects to promote economic development (as already conferred on existing levying authorities).
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Only being extended to Mayoral CAs.
Going through Parliament (June 2018) for WECA, C&PCA, LCRCA & WMCA.
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Low – Moderate
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Subject to consultation with local businesses and a local ballot.
Can vary by up to 2p in the pound. Note that where more than one supplement is in place, combined value must not be more than 2p in the pound.
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Moderate
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Limited to infrastructure investment and consultation with businesses must outline how the money raised is going to be spent.
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B
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3) Mayoral
Infrastructure Levy
|
No |
Local Government Finance Bill 2016-17 (fallen). No current intention to revisit.
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Ability to introduce a supplement on Business Rates (of up to 2p in the pound) to raise funds for infrastructure projects on a project that the authority is satisfied will promote economic development in its area.
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Only applicable to Mayoral CAs.
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Moderate
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Can raise supplement after consulting with affected businesses and issuing a prospectus. No need to ballot.
Can vary by up to 2p in the pound. Note that where more than one Infrastructure Levy is in place, combined value must not be more than 2p in the pound.
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Moderate
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Can only be spent on the project to which the supplement relates or in paying off loans made for the project
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B
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4) Mayoral precept |
Yes |
The CA (Finance) Order 2017. |
Available in Mayoral CAs with agreed and legislated devolution deal. |
No formal variation in principle. All Mayoral CAs, apart from WECA, have same scope of powers. |
Moderate |
Set by Mayor in agreement with leaders of constituent members of CA.
Secretary of State retains power to require a referendum and set threshold limit.
No limits were set in 2018/19. |
Moderate |
Can only be used to fund Mayoral responsibilities. Budget needs to be agreed by constituent members. |
B
|
5) Fire and Rescue (F&R) precept |
Yes |
The Combined Authorities (Finance) Order 2017. |
Where CA has taken control of F&R responsibilities, precepts can be raised on Council Tax to fund these roles. |
Only applicable where Mayor has taken on responsibility for F&R. |
Low - Moderate |
Set by Mayor in agreement with constituent members of CA. Note that this forms part of the General Mayoral Precept, rather than a precept in its own right. |
Low |
Limited to Mayoral functions, including F&R. |
C |
6) Police and Crime Commissioner (PCC) |
Yes |
Combined Authorities (Finance) Order 2017. |
Precepts can be raised on Council Tax to fund the role of the PCC. |
Only applicable where Mayor also has PCC responsibility. |
Low - Moderate |
Set by Mayor and reviewed by the Police and Crime Panel. Secretary of State retains power to require a referendum – and sets threshold limit each year. |
Low |
Limited to functions of PCC. |
C |
7) New 'Enterprise Zones' |
No |
Local Government Finance Bill 2016-17 (fallen). |
As part of plan to introduce 100% Business Rate retention, some authorities were to be given powers (through regulations from Secretary of State) to exempt specific areas from calculations across the pooled area – in effect creating locally- determined Enterprise Zones where increased Business Rates are fully retained locally (and any losses also absorbed). |
Would have been applicable within authorities as specified in Local Government Finance Act 2012 and amended by the fallen Bill. |
Moderate |
Allocation of Enterprise Zones would have allowed for use of tax increment finance. Boosting potential borrowing power of CAs. |
Moderate |
In principle, increased revenues could be spent as the CA saw fit. As this is likely to be tied to Tax Increment Finance – future funds would probably need to be earmarked for debt repayment. |
C |
8) Strategic Infrastructure Tariff |
No |
Consultation: Supporting housing delivery through developer contributions. |
This would extend current powers of Mayor of London to levy a Community Infrastructure Levy. It would be a charge (per square meter) on developers. |
CAs |
Moderate |
Set by the authority and based on total level of development. |
Low |
Needs to be spent on providing necessary additional infrastructure required for the development or funding of a specific project. |
C |
9) Transport borrowing powers – Combined Authorities |
Yes |
Conferred through Order establishing the CA, based on Local Government Act 2003 |
CAs can borrow for spending transport-related projects in line with usual prudential rules that would be applied to Local Authorities. |
All CAs |
Moderate - high |
In principle, this gives significant flexibility. However, borrowing needs to be financed in future – which requires certainty over future revenue streams. |
Low - moderate |
Borrowing limited to funding transport investment, but with control over where for transport. |
B |
10) Borrowing powers - Mayoral CAs |
Yes |
The Combined Authorities (borrowing) regulations 2018 |
Mayoral CAs have further borrowing powers to meet non-transport related CA responsibilities – for example economic regeneration or housing. |
Available to all Mayoral CAs with agreed debt caps with HM Treasury |
Moderate - High |
In principle, this gives significant flexibility. However, borrowing needs to be financed in future – which requires certainty over future revenue streams. |
Moderate |
Borrowing limited to CA Functions (other than transport), but with control within those functions. |
B |
11) Bus franchising powers |
Yes |
Bus Services Act 2017 |
Where applicable, CAs are able to set the rules for local bus services, including the routes, timetables and fares.
Where this happens, Bus Services Operator Grant will be paid to the CA and the CA will need to pay for the running costs of any franchised services.
CAs would also be able to raise revenue from bus fares. |
Current Mayoral CAs have this power (although the potential North of Tyne MCA will not).
Non-Mayoral CAs can only do so with agreement from Secretary of State and with laying of regulations.
Both require consultation. |
Moderate |
Grant funding is relatively fixed (TfL receive ~£93m a year).
There is an opportunity to raise revenue (if chose to do so) – for example, TfL bus fares amount to
~£1.5bn a year. However (see “spending” – unlikely to be “extra” money – as funds service). |
Low |
Whilst revenue raising power is significant – spending likely to be focussed on running / improving services. |
B |
12) Road User Charging |
Yes |
Transport Act 2000 |
Allows for charges in respect of the use or keeping of motor vehicles on roads.
|
Can be introduced by local traffic authority or Integrated Transport Authority and one or more local traffic authorities, for purposes of funding local transport plan.
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High |
Scheme is at the discretion of the traffic authority – can be set according to a range of criteria including time of day and type of vehicle.
Can only be made if it appears desirable for the purpose of directly or indirectly facilitating the achievement of policies in the licensing authorities’ local transport plans.
Central Government has power to require consultation / inquiry into |
Low - Moderate |
Revenues are strictly hypothecated for a period of at least ten years, for spending on delivery of local transport plan.
After this hypothecation period spending must be on things that “offer value for money”, and the legislation provides for central Government to issue guidance.
|
C |
13) Workplace Parking Levy |
Yes |
Transport Act 2000 |
Introduction of licensing scheme for workplace parking.
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Can be introduced by local traffic authority, for purposes of funding local transport plan.
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Moderate |
Levy can vary by a range of factors.
Can only be made if it appears desirable for the purpose of directly or indirectly facilitating the achievement of policies in the licensing authorities’ local transport plans.
Central Government has power to require consultation / inquiry into the scheme.
|
Low - Moderate |
Revenues are strictly hypothecated for a period of at least ten years, for spending on delivery of local transport plan.
After this hypothecation period spending must be on things that “offer value for money”, and the legislation provides for central Government to issue guidance.
|
C |
14) Mersey Tunnels |
Yes |
Mersey Tunnels Act 2004 |
Toll for using Mersey Tunnels.
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Only available in LCRCA
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Low |
Can only ordinarily be raised by an amount linked to inflation (RPI).
Further changes need agreement from Secretary of State.
|
Low - Moderate |
Part hypothecated for spending related to the tunnels. Any excess can now be used (since 2004 Act) to contribute to delivery of local transport |
A |
15) Tyne Tunnels |
Yes |
River Tyne (Tunnels) (Revision of Tolls) Order 2018, River Tyne (Tunnels) Order 2005(b).
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Toll for using Tyne Tunnels.
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Only available in NECA
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Low |
Can only ordinarily be raised by an amount linked to inflation (RPI).
Further changes need agreement from Secretary of State and Order to be laid in Parliament.
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Low |
Completely ring fenced for running the tunnels or to contribute to tunnels’ reserve.
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D |
16) New taxes - eg Tourist Tax |
No |
N/A |
No existing basis for new taxes to be levied at a local level (including, but not limited to, CAs). Would require (Primary) Legislation, likely to be significant time before this is a viable option. Otherwise would need to be undertaken through voluntary agreement with industry / area impacted.
|
N/A |
High |
New local tax would (presumably) provide significant flexibilities for CAs to determine the rate and structure of the instrument.
|
Moderate - high |
In principle, new taxes could be levied without specification of where it would be spent. However, in practice, to gain buy-in it is likely that revenue from new taxes would need to be attached to specific areas of expenditure.
|
B |
17) Funding from constituent councils |
Yes |
Set out in Order establishing CA |
The constituent councils must meet any reasonably incurred costs of the CA, for a set of activities prescribed in the Order. |
Extent of responsibilities (and, such, scope of the funding requirement) varies between CAs. |
Low |
Determined with constituent councils. No certainty over future of funds. |
Moderate |
Scope of spending restricted by Order under which CA was established. |
A |
18) Transport Levy |
Yes |
Set out in Order establishing CA and Transport Levying Body Regulations (amendments).
|
CAs that have taken on transport functions also have powers to charge a Transport Levy on their constituent councils. |
For all CAs that are Transport Levying Body – level varies by CA and set by CA. |
Low - moderate |
Levy is set by the CA, but scale is determined by the extent of transport functions conferred to the CA – these are set out in the establishment order. |
Low - moderate |
Limited to spending on transport functions. |
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19)
Gain share /Investment Fund Grant
|
Yes |
Devolution deals |
First delivered through devolution deal with GMCA and Government, the fund was envisaged as being based on the increase in tax revenue driven by actions of the CA.
Deals agreed later moved to a notional concept of gain share, meaning that this has effectively turned into a yearly grant.
|
Available in Mayoral CAs. The size of the grant varies between different CAs. The split between revenue and capital also varies between CAs.
Also for WYCA – agreed in 2014 Growth Deal.
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Low |
Initially agreed over a 30-year period. However, this is subject to review by HM Treasury / MHCLG every five years with Secretary of State (MHCLG) deciding whether funding will continue. As such, there is no guarantee that it will continue.
|
Low - moderate |
Part of Single Pot (see detail below)
Each CA is subject to scrutiny from HM Treasury on this spending and a full review over five years, meaning that the ongoing nature of the grant is not guaranteed.
There are restrictions over how (e.g. specifications between capital and revenue spending) and when (e.g. specific rules on timescales) the money is spent.
|
A |
20) Transport Grant |
Yes |
Devolution deals |
The grant is made up of several existing funding streams, potentially including:
a) intergrated transport
b) Highways maintenence block (formula funding)
c) Highways maintenence incentive funding
d) National Productivity Investment Fund (2017/18 only)
e) Pothole action fund
|
Only available to Mayoral CAs
Amounts and streams included vary by MCA
|
Low |
An amalgamation of existing funds - no extra revenue raising power. |
Moderate |
Part of single pot (see detail below) |
A |
21) Transforming Cities Fund |
Yes |
Announced in Autumn Budget 2017 |
A four-year, £1.7bn fund focused on improving intra-city connectivity in England’s City Regions. |
Mayoral CAs in existence at time of Budget received a total of £840m in fixed allocations, ranging from £59m to £250m.
Non-Mayoral CAs (and SCRCA) are required to bid into the remaining
£840m pot in a competitive process. |
Low |
Mayoral CAs receive fixed allocation, over a fixed time period.
Non-Mayoral CAs will need to compete to get funds. |
Low - moderate |
Mayoral CAs can invest in strategic investment priorities, as determined by the CA. Likely to form part of the “Single Pot”.
Non-Mayoral CAs need to have expenditure agreed through competitive process. |
|
22) Housing Investment Fund |
Yes |
Devolution deal |
A loan from the Government which CA can use to lend to local developers to help them to fund quicker housing delivery in the local area. |
Only available in GMCA. |
Low |
Amount fixed and agreed with central Government. |
Low - moderate |
Must be on housing. Recent changes have increased flexibility to recycle funds between years. |
A |
23) Housing and Infrastructure Fund |
Yes |
Devolution deals |
Competitive capital grant provided to LAs and CAs to acquire land, deliver physical infrastructure and invest in housing. |
Available in CAs - amounts vary by CA |
Low |
Competitive process – fund fixed to maximum of £2.3bn until 2021.
CAs will need to be successful in bidding / negotiating with Government for grant. |
Low |
Tied to specific projects. |
D |
24) Land Remediation Fund |
Yes |
Devolution deals |
Grant funding from Government to CA focussed on bringing brownfield land back into use for housing and employment. |
Available in GMCA and WMCA – but part of housing package, rather than as part of devolution
/ CA freedoms |
Low |
Agreed with central Government as part of Devolution deal. Fixed over a given period of time. |
Low - moderate |
Specifically for remediation activity – but with flexibility within that category. |
A |
25) Work & Health Programme funding |
Yes |
Devolution deal |
Portion of national Work and Health Programme budget devolved to CA so that they can co-design and commission the service. |
Only available in GMCA (and London)
– devolution deal agreed the devolution of control over funding for the Work and Health Programme. |
Low |
Determined nationally (and matched through European Social Fund). |
Low |
Ring-fenced for Work and Health Programme. No flexibility apart from over who to commission. |
D |
26) Apprenticeship Grant |
No |
Devolution deals |
A grant devolved as part of Devolution deals, however national scheme is now closed. |
Amounts vary by Mayoral CA |
Low |
Fixed amount from central Government |
Low |
Mayoral CAs had ability to design criteria, but within fairly tight constraints. |
D |
27) Life chances fund |
Yes |
Devolution deal 2016 |
Bringing together of existing funding streams (e.g. national Troubled Families programme, Life Chances Social Investment Fund) into one coordinated pot. |
Only available in GMCA |
Low |
Fixed amount from central Government. |
Moderate |
The CA will agree with the Government what the fund should achieve, and must make sure that the fund is spent to deliver these agreed outcomes. Within this, GMCA will be able to make their own investment decisions. |
A |
28) Local Growth Fund |
Yes |
Devolution deals |
A competitive fund for Local Enterprise Partnerships and council partners to invest in projects to improve each CA.
The LGF is made up of a range of different funding streams, including ‘flexible’ funding that can be spent on a range of local growth priorities, and funding for particular projects. |
Available to CAs where CA and LEP have agreement to do so / CA is the accountable body |
Low |
Fixed amount from central Government. |
Moderate |
Where available to Mayoral CAs it forms part of Single Pot (see below for detail). |
A |
29) Health & Social Care |
Yes |
Devolution deal |
More influence over £6bn spending in City Region each year, and £450m of “Transformation Fund” up to 2021. |
Only for Greater Manchester |
Low |
Existing funds – no extra revenue raising power |
Moderate - high |
Spending limited to health and social care – but this is a large, important and high priority area. |
A |
30) The Single Pot |
Yes |
Devolution deals |
A single pot, bringing together a variety of existing budgets, including transport grants, with flexibility to move funding between different types of projects and spend in different years, to support the local economy. |
Available to Mayoral CAs. Existing budgets that are brought together to form the single pot are different for some CAs. |
Low |
An amalgamation of existing funds – no extra revenue raising power. |
Moderate |
Spending subject to Single Assurance Framework agreed between CA and MHCLG.
However, individual elements (e.g. LGF and Investment Fund Grant) of pot may also be subject to continued scrutiny under existing arrangements for each element, meaning that flexibility is more limited than name implies |
A |
31) Adult Education Budget |
No |
Devolution deals (and secondary legislation) |
Brings together funding for adult education, outside of apprenticeships and loan funding for higher-level skills provision; Community Learning; and Discretionary Learner Support (help with extra costs to overcome barrier to learning). |
Will be available for Mayoral CAs. |
Low |
An amalgamation of existing funds – no extra revenue raising power. |
Moderate |
Spending potentially limited to adult education
– but with flexibility within that. |
A |
32) Mayoral Capacity Fund |
Yes |
Budget 2017 |
£1m a year revenue grant for 2018/19 and 2019/20 for MCAs to boost capacity. |
Available to Mayoral CAs. |
Low |
Grant funding – but a small amount. |
Moderate |
Spending limited to boosting the new mayors’ capacity and resource. |
A |