7/ This is a real opportunity to rebalance the UK economy.
But the test now is delivery - turning fiscal devolution, including income tax sharing, into a system that drives the public investment needed to support regional growth.
6/ That means getting serious about:
➡️ Tax increment financing
➡️ Reforming the PWLB to support long-term, place-based investment
➡️ Unlocking private capital to deliver public infrastructure
5/ That’s why the how matters just as much as the what.
If places are to make the most of devolved revenues, they need tools to invest upfront and capture future growth.
4/ And crucially: how do we avoid widening gaps between places?
Without proper equalisation, this risks entrenching inequalities rather than reducing them.
3/ But the hard bit starts now.
Fiscal devolution isn’t just an announcement - it’s about design:
- Which taxes (and how much?)
- What real control places actually have
- Who goes first
2/ The UK is a global outlier in how centralised it is.
As we argued in our report, giving regions a stable share of tax revenues is how you unlock long-term investment - especially in transport.
1/ Said this in our transport report, and good to see it in Reeves’ Mais Lecture.
Plans for fiscal devolution, including a share of income tax, are overdue.
It stifles growth that mayors take on the risk to deliver projects, while central government captures the upside through rising tax receipts.
7/ This is a real opportunity to rebalance the UK economy.
But the test now is delivery - turning fiscal devolution, including income tax sharing, into a system that drives the public investment needed to support regional growth.
6/ That means getting serious about:
➡️ Tax increment financing
➡️ Reforming the PWLB to support long-term, place-based investment
➡️ Unlocking private capital to deliver public infrastructure
5/ That’s why the how matters just as much as the what.
If places are to make the most of devolved revenues, they need tools to invest upfront and capture future growth.
4/ And crucially: how do we avoid widening gaps between places?
Without proper equalisation, this risks entrenching inequalities rather than reducing them.
3/ But the hard bit starts now.
Fiscal devolution isn’t just an announcement - it’s about design:
– Which taxes (and how much?)
– What real control places actually have
– Who goes first
2/ The UK is a global outlier in how centralised it is.
As we argued in our report, giving regions a stable share of tax revenues is how you unlock long-term investment - especially in transport.
Our favourite diagram from the report - @msingerhobbs.bsky.social and I know which city we want to live in!
🚎 Mass transit drives thriving high streets and local growth – but mayors and cities currently take the risk and don't always reap the rewards. Letting them keep and invest in that growth could unlock UK cities
📻️ @aditisriram.bsky.social on @LBCNews 🔗 www.ippr.org/articles/transport-and-growth
If we’re serious about growth, we can’t just announce projects.
We have to fix the funding model - so cities like Bristol can build the infrastructure that creates businesses, jobs and homes.
France does this differently.
Regions receive a share of national tax revenues, giving them stable funding to invest in long-term infrastructure like tram systems.
We need to take a serious look at how we fund local transport in the UK.
So why don’t we build it?
Mayors take the risk of delivering big transport projects.
But when productivity rises, the increases in income tax, corporation tax and VAT goes straight to the Treasury - not the city that made it happen.
That imbalance matters.
We’ve done this before.
Mass transit connects people to better jobs, supports local business, and makes it possible to build better connected homes.
That’s what productivity should look like: more opportunity, higher pay, and a better quality of life.
A century ago, Bristol had 17 electric tram routes running across the city.
Today, it has no mass transit system at all.
Meanwhile, 23 smaller cities in France have modern tram networks.
A quick intro: I’m Aditi - an economist at @ippr.org and a proud tax-design nerd, working on how to make our systems fairer, more effective and actually work for people.
