Tony Travers` presentation

Implications for London
Tony Travers
LSE
Implications
• Longer-term squeeze on expenditure
• Opportunities for London and other cities
• Fiscal devolution
• Challenges for London
Longer-term squeeze on expenditure
• ‘Unprotected’ spending will fall
• Boroughs, police, fire
• Capital expenditure planned to be flat as a % of GDP
• But, HS2, HS3 may pre-empt resources
• Scotland, Wales, Northern Ireland may be able to
increase ‘Barnett’ funding because of post-election
deals
• Outside the capital, London not seen as particularly in
need of extra funding
Opportunities for London
- and other cities
• Pressure on public spending may lead to
devolution of spending
• NHS to Greater Manchester
• Skills etc to GM and London
• Other service funding?
• Whitehall is poor at managing major projects,
especially IT and procurement of assets
• TfL, Crossrail, boroughs better
Fiscal devolution
• Tiny steps in England taken at Budget 2015 with
100% retention of NDR by Greater Manchester
and Greater Cambridge
• Scotland, Wales: tax devolution
• Minority government might be able to do a deal
relating to fiscal devolution
• London needs convincing governance for
potential fiscal/public expenditure devolution
Challenges for London
• Risk that a government deal with minority parties
could be ‘anti-London’
• There is no ‘London Nationalist Party’
• That city will be required to pay for its own
infrastructure
• Hard to deliver mega-projects…
• Needs to be able to capture and re-invest its own taxyield
• Needs Mayor and MPs to fight for London’s interests
Implications for London
Tony Travers
LSE