The U.K. Devolution & The U.S.

It has been a disappointing primary season for the United States. Candidates in both campaigns have not discussed the ways that the federal government will empower cities – the engines of economic growth and social progress.

Without tackling this difficult challenge, the cities will have to face things on their own – including taking on even more responsibilities if the longer-term budgetary trends continue. Growth in mandatory spending like Medicare and Social Security has crowded out federal contributions to housing, infrastructure, development in infrastructure and more. This will become even more dramatic ad the elderly population continues to grow.

BIRMINGHAM, ENGLAND - OCTOBER 04:  Chancellor of the Exchequer George Osborne speaks to delegates at the Conservative Party Conference on October 4, 2010 in Birmingham, England. On the second day of the conference the Chancellor announced cuts to welfare payments.  (Photo by Peter Macdiarmid/Getty Images)

The stunning contrast is in the United Kingdom, where there is a conversation about the devolution of central government power. In the past few years, this devolution has gone from a goal to a part of the national agenda. George Osborne, Chancellor of the Exchequer has been the leader of these “city deals” which creates opportunities for metro areas in Britain to negotiate for greater powers and discretion to strike detailed devolution agreements. In Britain’s election season, the Conservative and Labour parties unveiled competing proposals for how to decentralize power.

Just a few weeks ago, while delivering a speech to the Conservative Party conference Osborne introduced a few new approaches to advance the devolution agenda that are quite bold.

  • The establishment of an independent infrastructure commission

“If we’re going to build, then we have to shake Britain out of its inertia on the projects that matter most. There’s an idea, put forward by many people, including some Labour politicians, and its time has come. An independent National Infrastructure Commission. A commission, set up in law, free from party arguments, which works out calmly and dispassionately what the country needs to build for its future and holds any government’s feet to the fire if it fails to deliver.”

  • Establishing a power balance that reflects the nation’s strengths

“In the end it all comes down to where the power lies. To who makes the decisions … It’s time to face facts. The way this country is run is broken. People feel remote from decisions that affect them. Initiative is suffocated. Our cities held back. There’s no incentive to promote local enterprise.”

  • Allowing local areas to collect their business tax receipts

Today I am embarking on the biggest transfer of power to our local government in living memory. We’re going to allow local government to keep the rates they collect from business. That’s right, all £26 billion of business rates will be kept by councils instead of being sent up to Whitehall. Right now, we collect much more in business rates than we give back in the main grant. So we will phase out this local government grant altogether.”

  • Termination the uniform business tax rate in favor of allowing local areas to determine their own rates

Yes, further savings to be made in local government, but radical reform too. So an end to the uniform business rate. Money raised locally, spent locally. Every council able to cut business taxes. Every mayor able to build for their city’s future. A new way to govern our country. Power to the people. Let the devolution revolution begin.”

In some ways, the momentum of devolution in Britain would only happen in a matter of time after being one of the most centralized countries of the OECD nations and having an outrageously outdated balance of power.

So where is it in the United States? It is true that power is already much more decentralized in America, but there has been so little debate over how to make this devolution of power, making it a testament to the shallowness of the current political debates.


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