This summer marks 25 years since the Greater London Authority (GLA) was established. Fittingly, the government of the capital is facing something of a quarter-life crisis.
Like every global city, London is a place of contradictions – enough to make it staggeringly difficult to govern effectively. For example, London is both too big and, strangely, too small. The GLA arguably has too little direct influence over the nearby counties over which it casts its stark economic shadow. At the same time, grappling with its own internal complexity and diversity, the city is always calling upon the support of a ‘sub-regional' tier which, as things stand, is drastically underpowered.
The recent Spending Review was a particularly mixed bag for the capital. Major investment packages were concentrated in city regions elsewhere in England, while key London schemes, from the Bakerloo Line extension to housing infrastructure, were again left unresolved
London absorbs the most investment… and it also finances the rest of the national economy. Despite having the longest-established regional authority in the country – home to the most powerful directly-elected individual in the land - London's institutions remain underpowered, its fiscal tools limited, and its governance arrangements out of step with both its complexity and its role in the country.
Over the past decade, the energy and fervour of an unprecedented devolution programme has been playing out, traversing a change of government. And all of that activity has been focused elsewhere. The introduction of metro mayors and integrated funding deals has given cities like Manchester and Birmingham new forms of power and profile. Strategic authorities are now being planned across the whole country. Through it all, London abides: contributing a quarter of the nation's GDP, retaining just 7% of its tax revenue.
The recent Spending Review was a particularly mixed bag for the capital. Major investment packages were concentrated in city regions elsewhere in England, while key London schemes, from the Bakerloo Line extension to housing infrastructure, were again left unresolved. Changes to the Green Book that influences public investment decisions indicate a longer-term shift in strategy – one that is, in all fairness, totally understandable. Government desires a regionally rebalanced economy.
All of this is indicative of London's more fundamental problem. A global city should not have to live or die by decisions made in the national treasury. London needs the powers and retained resources to make big decisions for itself. That includes control over a greater share of its tax base, more discretion to introduce levies that reflect its economic realities, and the ability to pursue long-term infrastructure, housing and climate priorities without waiting for ministerial approval. Compared to Paris or New York, London is horribly constrained by the nature of its governance.
There was, though, one genuinely encouraging development in the Spending Review. Buried in the detail was the announcement that London will be offered a single, integrated funding settlement from 2026-27. This would put the capital on similar terms to Greater Manchester and the West Midlands, with multi-year, place-based funding across key domains like transport, skills and housing.
This is a step forward. But it must be the beginning of a bigger shift, not an effort to simply align London with other regions. London is different, and it should be governed differently. It is a global city, and its governance should reflect that.
London's Boroughs – whether or not there are too many of them! – have also been working with too little. As the city's autonomy grows, so should the directly-held powers of the local systems that make it up. That doesn't necessarily look like the ideas of a formalised role for those boroughs in the functioning of the GLA, as in the proposals set out earlier this year by London Councils. Instead, London's extraordinary diversity might be better served by the evolution of its sub-regional partnerships – each of which would be a mighty Combined Authority if it happened to exist elsewhere in England.
The 25th anniversary of the GLA should prompt serious reflection. The capital still lacks the powers it needs to act like the global city it is. As the LSE's Professor Tony Travers has recently said, it is not as if there is only a finite amount of devolution to go around. London's powers should grow in step with the rest of regional England, and with no top limit. An ambitious plan for an autonomous, dynamic capital would be good news for the whole country.
Dr Simon Kaye is policy director of independent think-tank Re:State
