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Fiscal devolution is all the rage. Rachel Reeves' Mais lecture and visitor levy-setting powers are interesting, but only tinker with the edges.With the next incumbent of No10 Downing Street all but confirmed, localists are quite excited.England remains one of the most centralised countries in the developed world. Giving mayors and local leaders greater control over revenue streams could strengthen local accountability and encourage localised policies.Localism is attractive. Wherever possible, decisions should be taken closest to the people affected by them. But we should not mistake fiscal devolution as a transfer of tax revenues from Whitehall to town halls. Successful devolved states are built over decades, not Parliamentary terms.Our greatest challenge is capability. We are yet to invest in the financial, economic and commercial skills needed for fiscal devolution. Managing revenue risk, borrowing and long-term economic strategy requires expertise that is unevenly distributed across the sector.We may once again be talking about devolution by default.While democratic engagement is weak, England still lacks the foundations to make fiscal devolution transformative. Turnout in local elections remains low and public understanding of the powers exercised by mayors, combined authorities and councils is limited.Fiscal autonomy requires a strong democratic mandate if difficult spending and taxation decisions are to command public legitimacy.Councils have evolved into delivery agents for national policy initiatives rather than autonomous institutions. Funding mechanisms, performance regimes and statutory responsibilities have fostered compliance rather than innovation. A culture of local fiscal responsibility cannot be created overnight.Our greatest challenge is capability. We are yet to invest in the financial, economic and commercial skills needed for fiscal devolution. Managing revenue risk, borrowing and long-term economic strategy requires expertise that is unevenly distributed across the sector.None of this is an argument against devolution. But if devolution is to be more than a zero-sum exercise, it must be accompanied by a programme of democratic renewal, institutional strengthening and capability building.Let's opt for devolution by design.Iain Murray is director of public financial management at the Chartered Institute of Public Finance and Accountancy

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FISCAL DEVOLUTION

England still lacks the foundations to make fiscal devolution transformative

By Iain Murray | 10 July 2026

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