In order to understand the long-term economic challenges that any devolution-type reforms face when trying to promote the interregional Levelling Up of productivity, it is essential to consider the likely financial and fiscal issues arising in the relationships between central and sub-central government. The reason is that the changes in these fiscal relationships may either narrow or exacerbate interregional productivity inequalities, depending on their form and implementation.
It is therefore important to set the UK central-sub-central governance features in the context of the OECD-wide experience of central-sub-central government financial and fiscal relationships. This allows us to better understand the nature and financial performance of the UK governance system and to identify the opportunities and challenges associated with any potential reforms in Levelling Up.
Author Philip McCann