Magazine article Public Finance

Ease Borrowing Rules, Says O'Neill

Magazine article Public Finance

Ease Borrowing Rules, Says O'Neill

Article excerpt

Local authority prudential borrowing rules will need to be reviewed if additional fiscal powers are devolved to town halls, a leading economist has said.

City Growth Commission chair Jim O'Neill said its proposal to allow combined city authorities to bid for 'devolved status', with greater control overtaxes, could also lead to the creation of a municipal funding market in the UK.

The group's Unleashing metro growth report proposed that combined authorities, such as Greater Manchester, submit bids for devolved status. These would be examined by an independent devolution committee, to check they met required governance standards. Following this, localisation of property taxes from Whitehall and long-term funding settlements would be agreed.

Speaking to Public Finance, O'Neill said this would need to be backed by increased freedom to borrow, including clearer rules on local authority bonds. …

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