Mayor Jason Perry has urged the Government to ensure its plans for devolution give London’s boroughs the powers and resources they need, rather than simply transferring control from Whitehall to City Hall.
Responding to a letter from First Secretary of State Louise Haigh and Housing Secretary Angela Rayner, Mayor Perry welcomed the Government’s ambition to move power out of Westminster and its recognition that strong local authorities must be the bedrock of reform.
However, he warned that devolution would achieve little for local communities if funding and decision-making stopped at regional mayors or strategic authorities.
Mayor Perry said:
“Transferring powers from Whitehall to City Hall may change where decisions are made, but it does not necessarily bring them any closer to Londoners.
“London’s boroughs carry many of the statutory responsibilities, financial risks and delivery obligations that most directly affect residents. Devolution must therefore mean that funding follows function, powers follow responsibility and the benefits of local growth reach the councils that help create it.”
The Mayor has called for the Government’s forthcoming White Paper to establish a clear route through which powers, funding and incentives will reach the councils responsible for delivering local services.
He said that the Mayor of London and Greater London Authority should receive funding for their strategic responsibilities, whilst resources connected to borough services should be devolved directly to the boroughs. He also warned against creating additional administrative tiers that could top-slice funding and blur democratic accountability.
The Mayor highlighted Croydon’s potential to become an early delivery partner for the Government. One of London’s largest and most diverse boroughs, Croydon has secured more than £1.2 billion of inward investment since 2022 and has substantial potential for further brownfield development and economic growth.
Mayor Perry said:
“Croydon is an opportunity borough. We are not seeking special treatment, but offering to become a willing delivery partner for the Government.
“With the right powers, funding and flexibility, we can turn investment into homes and jobs, develop preventative services that reduce long-term costs and demonstrate reforms that could subsequently be applied elsewhere.”
His response also highlights the urgent need to reform funding for temporary accommodation. Outdated Housing Benefit subsidy rules currently leave Croydon facing an annual gap of approximately £45 million between the cost of providing temporary accommodation and the funding it can recover.
Mayor Perry has called for the subsidy benchmark to be updated, the 90% restriction to be reviewed and Housing Benefit and Rent Standard rules to be aligned. These changes would give councils greater freedom to invest in their own accommodation, reduce reliance on expensive nightly-paid placements and offer families greater security.
He concluded:
“Devolution must mean more than giving councils new responsibilities. It must give locally accountable authorities the resources and freedom to deliver.
“Croydon stands ready to work constructively with the Government and demonstrate what meaningful borough-level devolution can achieve.”
Mayor Perry’s full response is published below.
Dear Secretaries of State,
Devolution and support for strong, capable local authorities
Thank you for your letter of 6 August setting out the Government’s plans for devolution and local government reform.
I welcome the intention to move power out of Westminster and to give local leaders greater responsibility for promoting growth, building homes and improving public services. I also welcome your recognition that strong local authorities must be the bedrock of this work.
As I set out in my recent letter to Prime Minister Burnham, there is a significant opportunity to establish a new relationship between central and local government. That should include longer-term funding settlements, greater local flexibility, meaningful fiscal devolution and stronger incentives for councils to generate and retain growth.
For this reform to succeed, however, devolution must not stop at regional mayors or strategic authorities. Powers, funding and incentives should sit with the level of government responsible for delivery and democratically accountable for the outcome. London provides perhaps the clearest example of why this principle matters.
Transferring powers and funding from Whitehall to the Mayor of London may constitute devolution from central government, but it will achieve little for London’s boroughs if those powers and resources then stop at City Hall. Without a clear route for them to flow beyond strategic authorities, there is a danger that Whitehall centralisation will simply be replaced by regional centralisation. That would move decision-making geographically without bringing it meaningfully closer to residents.
London Boroughs carry many of the statutory responsibilities, financial risks and delivery obligations that most directly affect Londoners. They are also democratically accountable to their communities for the results. The principle should therefore be that funding follows function, powers follow responsibility and the incentives arising from local growth reach the authorities whose decisions and services help to create it.
The Mayor of London and the Greater London Authority should receive the proportion of funding that relates to the strategic responsibilities for which they are directly accountable. Powers and resources relating to services delivered by boroughs should be devolved directly to those authorities, or allocated through transparent arrangements agreed with them, rather than automatically being pooled or controlled at City Hall.
There will, of course, be matters that require coordination across London or collaboration between groups of boroughs. Sub-regional partnerships can play a useful role where there is a clear delivery case, but they should not become an additional administrative tier that top-slices funding or obscures accountability. Decisions should be taken at the closest effective level to the residents, communities and businesses affected by them. Boroughs should be partners in devolution, not simply delivery agents for another tier of government.
This distinction will be particularly important in relation to business rates and the local retention of growth. Boroughs create economic value through planning, regeneration, infrastructure, business support and local services, but too little of that value is retained and reinvested locally. Any move towards greater business-rate retention must ensure that the benefits reach the councils responsible for enabling growth, rather than being captured entirely at the regional level.
Croydon is particularly well placed to demonstrate what this approach can achieve. As one of London’s largest and most diverse boroughs, situated at the gateway between the capital and Gatwick, we combine significant brownfield development potential, a strong entrepreneurial economy and more than £1.2 billion of inward investment secured since 2022. We also experience, at scale, many of the housing, infrastructure and public-service pressures facing urban authorities across the country.
That is why Croydon should be seen as an opportunity borough: not a special case seeking special treatment, but a willing delivery partner for the Government. With the right powers, funding and flexibility, we can turn investment into homes and jobs, test preventative approaches that reduce pressure on expensive statutory services, and demonstrate reforms that could subsequently be applied elsewhere.
My recent letter to the Housing Minister on temporary accommodation provides a practical example of why this wider reform is needed. For many households in temporary accommodation, the Housing Benefit subsidy available to councils remains restricted to 90% of the January 2011 Local Housing Allowance rate. In Croydon, the resulting gap between the cost of providing accommodation and the subsidy recoverable is approximately £45 million each year.
This is not simply a funding pressure. It illustrates how nationally prescribed and outdated rules can limit the ability of locally accountable councils to pursue more effective preventative solutions. The current system makes it harder for authorities to invest in accommodation of their own, reduce dependence on expensive nightly-paid placements and provide greater security for families.
I have therefore asked the Government to replace the outdated benchmark with, at a minimum, the current applicable LHA rate; to review the 90% restriction; and to align the Housing Benefit subsidy and Rent Standard rules. These changes would give councils greater confidence to acquire, lease and develop accommodation, whilst improving outcomes for residents and delivering better value for the taxpayer.
This is precisely the type of reform needed to take the handbrake off local government. Devolution must mean more than transferring new responsibilities. It must align responsibility with funding, remove outdated national restrictions and give councils the freedom to invest in prevention, housing supply, regeneration and economic growth.
I would therefore encourage the Government’s forthcoming White Paper to state explicitly that devolution is intended to reach the level of government responsible for delivery, rather than stopping at strategic authorities. It should set out a clear route through which powers and funding will reach councils operating within those structures. In London, that must mean boroughs having the powers, flexibilities and growth incentives they need to fulfil the responsibilities Parliament has given them.
Croydon would welcome the opportunity to act as an early delivery partner, demonstrating how meaningful borough-level devolution can advance the Government’s objectives for growth, housing and public-service reform. I would welcome the opportunity to contribute to the Leaders’ Council meeting in September and to work constructively with you as these proposals are developed.
Yours sincerely
Mayor Jason Perry
Executive Mayor of Croydon
