Income Tax And Business Rates To Fund Coastal Transport And Housing In Devolution Shake-Up

Communities in Scarborough, Whitby and Filey will benefit from locally retained income tax and business rates as York and North Yorkshire gains unprecedented new devolution powers.

Local transport, affordable housing, and skills training across Scarborough, Whitby and Filey will soon be funded by locally generated income tax and business rates.

Prime Minister Andy Burnham has announced a major transfer of financial powers from Westminster, allowing local leaders to retain tax revenues to directly benefit their communities when the local economy grows.

The announcement coincides with the York and North Yorkshire Combined Authority becoming the first rural mayoral area in the country to be granted Established Mayoral Strategic Authority Status.

The new designation unlocks greater access to devolved powers, enabling the region to accelerate transport schemes, take control of local bus and rail services, and manage funding for sixteen to nineteen-year-old education.

Under the plans, metro mayors are expected to begin retaining a proportion of business rates from April 2027, followed by a share of income tax revenues a year later.

Alison Hume, the Member of Parliament for Scarborough and Whitby, welcomed the reforms as transformative for the coast.

Ms Hume said:

"The Prime Minister has today set out his ambitions for rewiring the state ahead of a Devolution White Paper in the autumn.

"Working collaboratively with mayors, the government will break up the trickle down power structures which have held areas like Scarborough and Whitby back for too long, and empower decision making closer to our communities.

"Mayors and new strategic authorities will be given a greater retention of business rates and a share of income tax, more powers to take over 16-19 education to reduce the number of young people not in education, employment or training, introduce integrated transport schemes, build social housing and invest in research and development.

"I look forward to working with the government and York and North Yorkshire Mayor David Skaith to drive regeneration in Scarborough and Whitby and unlock our massive potential.

"It’s vitally important that rural mayors are given the same settlements as the big city metro mayors to ensure deprived rural and coastal communities sitting in better off counties are not left behind."

The Government says the reforms will end a Whitehall-first culture, placing the burden on ministers to explain why powers should remain in Westminster.

David Skaith, the Mayor of York and North Yorkshire, says the newly acquired Established Status is a major milestone for the county.

Mayor Skaith said:

"This will be the biggest shift of powers, responsibilities and resources from Westminster to local leaders that we’ve ever seen before.

"The voices of people and businesses in Scarborough, Whitby and the villages will be heard more clearly than ever before as we decide how record levels of devolved funding are spent to tackle ingrained issues that are felt more tangibly on the coast, like poor transport, digital connectivity, access to well paid, meaningful, jobs, and opportunities to learn.

"We’ve already achieved a great deal in just over two years, supporting hundreds of projects and bringing investment into our communities.

"Now, with Established Status, we will have access to greater powers and funding, allowing us to go even further and faster to address some of the structural challenges holding our county back.

"This will help us fully realise the benefits of devolution and ensure decisions about our county are made by our county, for our county, and in our county by those who know it best."

Local authorities will also collaborate to deliver the new long-term vision for the region.

Councillor Carl Les, Leader of North Yorkshire Council, said:

"Our work within the Combined Authority has brought real benefits to our communities and businesses in North Yorkshire.

"We are working together to tackle regional inequalities and bring more equal opportunities through better job opportunities and improved skills and training as well as creating more affordable housing and dealing with the threat of climate change.

"Established Status is a recognition of all the hard work that has been done and will be vital in driving economic growth to improve lives and opportunities for our residents and businesses across the county."

Full details of the funding allocations will be set out by Chancellor John Healey in the Autumn Budget.